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Common Concerns & Questions About Bankruptcy

Surge in auto sales has meant more consumer debt

| Jan 8, 2020 | Creditors' Rights |

According to a recent report, the market for new automobiles is showing some signs of peaking, but the market for new auto sales remains strong.

Recent numbers suggest that, for 2019, automakers in the United States will, for the fifth year in a row, collectively sell more than 17 million new vehicles. While the manufacturers are not expected to top last year’s 17.3 million figure, it will be a record fifth year in a row in which carmakers sold more than 17 million cars in a year.

While this may be good news for the overall economy, the drawback is that it is creating an additional consumer debt burden on people in the Tyler area and around the country. For instance, near the turn of the millennium, only about one out of five Americans had automobile loans. Now, one out of three Americans are carrying debt in order to finance their vehicles. Moreover, many auto loans these days are for longer terms, possibly to account for the fact that Americans are buying bigger, more expensive vehicles like SUVs and minivans.

Having an auto loan may be easy for a Texas family to handle under good economic circumstances. However, losing one’s job or experiencing unexpected expenses, like in the case of a medical emergency, can quickly lead to an overwhelming predicament. After all, a family may have a lot of critical expenses that they need to cover. However, if they fail to pay back a car loan, it is possible that the family will lose their vehicle to the repossession process.

In these cases, a bankruptcy proceeding may be the best option a family has in these situations. Such action can initiate an automatic stay that may prevent creditors from taking certain actions, thereby allowing an individual to seek additional financial resources and/or develop a financial plan that makes sense for their situation. Those who want to learn more about how the bankruptcy process can prove beneficial for them should discuss the matter with an experienced attorney of their choosing.