Car About To Be Repossessed? Get Debt Relief For Your Bills
We all have that dream car that we have wanted since childhood. One day that dream may have become a reality. Unfortunately, that reality also came with a hefty car payment each month. That car payment may have pushed you into a debt that was unmanageable. What happens when the lender calls to inform you that the car is going to be repossessed?
Don’t Panic Yet
Most states have laws that will govern how a repossession must take place. Studying up on those laws will give you a plan of action to avoid losing your car. Your first step should be to reason with the lender. You may be able to work out a temporary payment plan that will stave off repossession.
Lenders who don’t want to negotiate still have to give you a chance to pay for the car. Most states require lenders to hold on to the car for a few days before attempting to sell it. This gives you some time to try to raise money to purchase the car again. Lenders then have to place the car up for auction to pay off as much of the loan as possible. You can participate in this auction in an attempt to get the car back.
Your lender must try to get fair market value for the car. For example, they cannot sell a Porsche for $1,000 as a means to collect more from you. However, any unpaid portion of the loan is still going to be your responsibility.
Look For Debt Relief
The bad news is the car is most likely gone. At this point, the lender has shown they are not going to talk to you about refinancing. However, they may change their mind if an auction fails to raise enough money.
The good news is you don’t have to pay the full amount of any unpaid portion of the loan. Lenders are going to look for as much money as possible. They are also going to want to do so as easily as possible. Going to a debt relief service should enable you to pay pennies on the dollar for any unpaid portion of the car loan.
Having your car repossessed may be a blessing in disguise. It will show you how important it is to manage your money in a responsible way. Budgeting, money management and a healthy savings account are all more important than a new car with a high car payment. Obtaining debt relief is a good way for you to start over from scratch. Maybe you can purchase that car in the future if you sacrifice and save up for it.
Tax Implications Of Debt Forgiveness
Having your debt forgiven is a great thing. You should also take a look at the tax implications of debt forgiveness. Any debt that is forgiven may be considered taxable income by the IRS. Therefore, you should consider whether it is cheaper to pay the debt off in full as opposed to having it forgiven.
Understanding how the IRS treats debt that is forgiven will avoid any big surprises when filling out a tax return. Forgiven debt treated as income could add hundreds to your tax bill. Hiring a debt lawyer to help you out could be a good idea. However, in many cases if you are insolvent – your liabilities are higher than your assets – you may not owe any taxes on the forgiven debt. Talk to a tax pro to advise you.
Panicking will do you no good when you find out our car is being repossessed. All you can do is let the process play out over time. Debt relief is available to help you out in an effort to avoid a repossession in the future or to settle the remaining balance on your car note that you are responsible for.
Having as much information as possible will help you decide the best course of action in response to this unfortunate event. Call us today to get more information on specific debt relief programs that will work for you. Fill out the form to get connected to debt relief specialists who are standing by to help.