Can I File Bankruptcy on a Car Title Loan?

Daniel Joelson

Daniel Joelson

Total Posts: 346

Published Date: January 23, 2024

Daniel Joelson has been in the consumer finance space since 1994, he has helped to develop underwriting manuals for the financial sector. With a vast amount of Knowledge in consumer finance, he has been writing articles for all types of loans. With his knowledge, he is able to help many people to answer different financial problems.

Title loans are a type of secured loan where borrowers use their vehicle’s title as collateral to get quick cash. Here are some additional points to consider:

  • Loan Amounts: The amount you can borrow with a title loan typically depends on the value of your vehicle. Lenders may offer loans ranging from a few hundred dollars to several thousand dollars.
  • Quick Approval Process: Title loans are known for their fast approval process, making them attractive for individuals who need immediate funds to cover unexpected expenses like medical bills or home repairs.
  • Risk of Repossession: Since title loans are secured by your vehicle, failure to repay the loan can result in repossession of your car or truck by the lender.
  • High Interest Rates: Title loans often come with high-interest rates, which can lead to substantial costs over time if the loan is not repaid promptly.
The Negative Impact of Defaulting on a Car Title Loan
The Negative Impact of Defaulting on a Car Title Loan

Can You File Bankruptcy on a Title Loan?

Bankruptcy is a legal process designed to provide relief to individuals overwhelmed by debt. Here is a deeper look at how title loans are affected by bankruptcy:

  • Chapter 7 Bankruptcy:
    • In Chapter 7 bankruptcy, most unsecured debts can be discharged, but liens on secured debts like title loans are typically not eliminated.
    • While you may not be personally liable for the debt after Chapter 7, the lender retains the right to repossess the vehicle if you default on payments.
  • Chapter 13 Bankruptcy:
    • Chapter 13 bankruptcy involves creating a repayment plan to reorganize debts over a specified period.
    • Title loans can be included in the repayment plan, allowing you to pay off the debt gradually. However, you must meet the terms of the bankruptcy plan to retain possession of your vehicle.
  • Lender’s Rights: Even in bankruptcy, the lender retains certain rights related to the vehicle used as collateral. They may enforce these rights if you fail to comply with the terms of the loan or the bankruptcy plan.

Key Considerations Before Taking a Title Loan

Before getting for an online title loan, it is crucial to weigh the following factors:

  • Total Cost of Borrowing: Calculate the total amount you will repay, including interest and fees, to assess the affordability of the loan.
  • Impact on Credit and Financial Health: Defaulting on a title loan can negatively impact your credit score and financial well-being. Consider alternative borrowing options with lower risk.
  • Repayment Terms and Conditions: Understand the repayment schedule and consequences of late payments or default.
  • Explore Alternatives: Research alternative sources of funding such as personal loans from banks or credit unions, which may offer lower interest rates and more favorable terms.
  • Communication with Lender: If you are facing financial difficulties, communicate openly with your lender to explore options for restructuring the loan or seeking temporary relief.

In conclusion, while title loans can provide immediate financial relief, they also carry significant risks, especially in the context of bankruptcy.

It is essential to evaluate all aspects of a title loan and consider alternative solutions before making a decision. Seeking advice from financial professionals or credit counselors can help you navigate challenging financial situations effectively.

Here at TFC Title loans, we have been helping people since 1994 to get the most money with their vehicle equity. We have a large network of referral lenders, to help you to get the right loan.

All of our referral partners are in compliance with the CFPB.

Need Cash Now? Get Approved In Minutes!

How Much Cash Can i Get?
Disclosures

DISCLAIMER: As our policy to make sure you know what we do and what are our limitations, we offer you these disclaimers. We are NOT A LENDER and we do not make short term cash loans or credit decisions. We are a referral service and work only with licensed lenders/brokers.

We may act as the broker for the loan and may not be the direct lender. Loan proceeds are intended primarily for personal, family and household purposes. We do not offer or service student loans.

*Loan amounts by the lenders vary based on your vehicle and your ability to repay the loan.

*Since we do not lend money directly we cannot offer you a solicitation for a loan, except in the state of California. In all other serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans and Auto Title Loans are not available in all states and all areas.

*Auto Title Loan companies typically do not have pre-payment penalties, but we cannot guarantee that every lender meets this standard. Small Business Loans typically do have pre-payment penalties and occasionally will use your car as collateral to secure the loan.

*All lenders are responsible for their own interest rates and payment terms. TFC Title Loans has no control over these rates or payments. Use of the work competitive or reasonable does not mean affordable and borrowers should use their own discretion when working directly with the lender.

*The amount of people who applied for a loan and we helped and those who received a loan is not the same. We cannot guarantee we will find a lender who will fund you.Just because you give us information on this web site, in no way do we guarantee you will be approved for a car title loan or any other type of loan. Not all lenders can provide loan amounts you may see on this web site because loan amounts are limited by state law and/or the lender. Some lenders may require you to use a GPS locator device on your car, active all the time. They may or may not pay for this or charge you for this. This is up to the lender and we have no control over this policy of the lender. Typically larger loans or higher risk loans use a GPS.

*In some circumstances faxing may be required. Use of your cell phone to receive updates is optional.

*Car Title Loans are expensive and you may have other ways to get funding that is less expensive. These types of loans are meant to provide you with short term financing to solve immediate cash needs and should not be considered a long term solution. Residents of some states may not be eligible for a loan. Rejections for loans are not disclosed to our firm and you may want to contact the lender directly.

*Car Title Loan lenders are usually licensed by the State in which you reside. You should consult directly with these regulatory agencies to make sure your lender is licensed and in compliance. These agencies are there to protect you and we advise making sure any lender you receive money from is fully licensed.

*Trading Financial Credit, LLC dba TFC Title Loans, Car Title Loans California, Dineromax. If you are using a screen reader and are having problems using this website, please give us a call at 1-844-242-3543 for immediate assistance.

Skip to content