What is the statute of limitations on car loans?<\/h4>
The statute of limitations on car loans varies by province, ranging anywhere from 2 to 10 years. It applies only to unsecured debt, for example, if you got a unsecured personal loan to pay for your car. Once the statute of limitations on your loan passes, your lender no longer has the right to sue you for repayment. However, be aware that most car loans are considered a secured form of debt so the statute of limitations would not apply.<\/p><\/div><\/article>
Will filing for bankruptcy discharge my car loan?<\/h3>
Probably not. In most cases, you\u2019ll either need to surrender your car to your lender or continue to pay off your car loan according to a modified repayment plan.<\/p>
How will defaulting on my car loan affect my cosigner?<\/h3>
If a family member or friend cosigned your car loan, they\u2019re legally responsible for paying back your loan should you default. If they fail to do so, your cosigner will be hit with the same consequence you\u2019re facing, including a lower credit score and the risk of being sued over an unpaid deficiency balance.<\/p>
I defaulted on my car loan. What can I do?<\/h3>
If you received a notice from your lender that your car loan is in default, you still have a few options to prevent your car from being repossessed. These include:<\/p>
- Contact your lender to set up a new payment plan.<\/strong> Your lender may be willing to adjust your payment plan to make it more manageable \u2014 especially if you have proof of economic hardship. If you\u2019re able to come to an agreement on a revised plan, make sure you get it in writing.<\/li>
- Refinance your car loan with another lender.<\/strong> If your credit score hasn\u2019t taken a huge hit, you may be able to refinance your car loan<\/a> with another lender. Even if you can\u2019t qualify for a lower rate, extending the term can make for smaller monthly payments.<\/li>
- Sell your car and pay off your loan in full.<\/strong> This is ideal if you owe less than your car is worth \u2014 you may even be able to make a profit from the sale. However, this may not be the best choice if your car loan is upside down. Here\u2019s what you should know before selling your car if you still owe on it<\/a>.<\/li>
- Surrender your car to your lender.<\/strong> If repossession is on the horizon and you\u2019ve exhausted all other options, you can voluntarily turn your car over to your lender. While this will still count as a repossession on your credit report, you won\u2019t be responsible for paying repossession fees.<\/li><\/ul>
Compare car loan refinancing options<\/h3>
\n\n <\/div>\n\n\n - Refinance your car loan with another lender.<\/strong> If your credit score hasn\u2019t taken a huge hit, you may be able to refinance your car loan<\/a> with another lender. Even if you can\u2019t qualify for a lower rate, extending the term can make for smaller monthly payments.<\/li>