Chapter 7 bankruptcy, also called liquidation bankruptcy, is a kind of bankruptcy that allows you to get out of debt by eliminating your debts through legal action. To do this, you must be willing to give up certain items that are not exempt from liquidation. They are then sold, and the proceeds are used to repay creditors. Once the proceeds are used up, the remaining debts are forgiven.
As of January 2019, more than 7 million borrowers are 90 days or more behind on their car loans, according to the New York Federal Reserve. That’s 1 million more than the previous high in 2010 when the U.S. was in the Great Recession. The Fed also noted a $584 billion jump in total auto loan debt, the highest number in the 20 years the Fed has been keeping this data.