The latest wrinkle in auto finance has a nasty edge to it, as lenders are pouncing on new technology that allows them to remotely shut off a borrower’s vehicle if they are only a few days late on a payment.
Writing for the New York Times and Boston Globe, Michael Corkery and Jessica Silver-Greenberg describe the advent of “Wall Street’s Big Brother,” a gizmo formally known as a starter interrupt device, which prevents a vehicle from running if a banker shuts it off for slow payment: “This new technology is bringing auto loans … into the lives of people with credit scores battered by the financial downturn.”
Meet the mother who had her car shut off on the day she had to bring her daughter to the emergency room, and the meet the banker who boasts of shutting down borrower’s vehicles while he shops at Walmart.
Sooner or later, though, another player is bound to show up in this game. That would be the local bankruptcy lawyer, who has access to the laws that will remedy he situation, and get the motor running again. And, as time goes on (or even now, if the loan was taken out more than two and a half years ago), the bankruptcy weapon of choice may be the Chapter 13 cramdown, which not only can get the debtor back on the road, but possibly with a lower payment to boot.