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Illinois bankruptcy: Delinquent auto loans are on the rise

The amount of people around the country, including some in Illinois, who are more than 60 days past due on their auto loan payments is slowly creeping upward. According to TransUnion, in the last three months, the percentage has gone up 0.88 percent. More car loans are being made to people who have things such as a bankruptcy, late payments and other delinquencies on their credit.

As the economy has improved, more people are ready to buy vehicles again. As such, some lenders have made contingencies for people whose credit may not be the best. In fact, the percentage of auto loans to people with credit that is not quite up to par comprises about 15 percent of auto loans. This percentage hasn't really changed in the past year, but the number of people who are now unable to make their payments has increased.

The problem with this is that many people are ending up buying cars that they really can't afford. It may be easier to get into a car, but eventually, the payment is going to come due, and there are an increasing number of people that are unable to make those payments. If this trend continues, there could also be a marked increase in repossessions.

Despite the fact that the economy is on the mend, there are many people in Illinois that are still having financial trouble. A too large car payment only adds to that stress. Filing for bankruptcy can give struggling consumers the chance to start over, but most people will still need reliable transportation. In that case, each consumer will have to decide whether it is in his or her best interest to reaffirm that auto loan.

Source: The Journal Gazette, "Tardy auto-loan payments edge up," Alex Veiga, July 1, 2013

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