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Thread: Can't afford car payments anymore. Help! :(

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    Default Can't afford car payments anymore. Help! :(

    I bought a pre-owned car in May but my daddy got very sick & need to put my $ towards his well being so I can't afford car payments anymore. I want to sell it but it's already been in 2 accidents so I know it won't sell for the car payoff amount. I'm thinking sell the car at half the payoff amount but then I still have the car payments that I can't afford. I have no idea what to do! Please help

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    Banned Melonie's Avatar
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    Default Re: Can't afford car payments anymore. Help! :(

    let the car be repo'd ... and then deal with the finance company.

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    Default Re: Can't afford car payments anymore. Help! :(

    Can't you get a job? Daddy, like your father, or daddy?
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
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    Senior Member Butrcup98's Avatar
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    Default Re: Can't afford car payments anymore. Help! :(

    ^^She means sugar daddy.

    How about refinancing the loan? Or calling the creditors and work out a different payment agreement.

    Repo-ing is a last resort to me. It hurts your credit pretty badly. Or, if the loan is in his name, it hurts his credit. And if you mess up his credit, I doubt he's going to be very happy with you when he gets better. Either way, if you can make some kind of payment, they should be willing to work with you. After all, in the end, all they want is their money.

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    Default Re: Can't afford car payments anymore. Help! :(

    ^^^ the problem is that the car has been involved in two accidents and is thus worth far less than it 'should be'. Selling the car at auction market prices right now will still result in a huge shortfall as well as the original car loan becoming immediately due and payable since the collateral was unilaterally 'disposed of' by the borrower.

    Unless she can afford to continue making car payments, the only realistic option is to dump the car back on the finance company via repo or better yet 'jingle mail' (i.e. let the lender eat the resale value loss) and THEN try to renegotiate more favorable repayment terms on the shortfall amount.

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    Default Re: Can't afford car payments anymore. Help! :(

    LOL!! No no! My dad dad, my father

    I was always told repo is the last resort but I guess I'm out of options? It's not only car payments but also insurance; both are over $300 each a month so I doubt lowering car payments will help

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    Default Re: Can't afford car payments anymore. Help! :(

    Call the finance company, explain your situation, and if all else fails, do a voluntary repossession. It will save them repo costs, and it may factor in when they get a judgment against you, and try to enforce it.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Can't afford car payments anymore. Help! :(

    Quote Originally Posted by glambman View Post
    Call the finance company, explain your situation, and if all else fails, do a voluntary repossession. It will save them repo costs, and it may factor in when they get a judgment against you, and try to enforce it.
    Will a voluntary repo hurt my credit? I guess I'm a little hesitate to call the finance company because I work for them Little embarrassing

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    Banned Melonie's Avatar
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    Default Re: Can't afford car payments anymore. Help! :(

    anything short of making the payments on time will hurt your credit. A voluntary repo i.e. 'jingle mail' is less damaging than an involuntary repo, which is less damaging than credit counseling, that is less damaging than filing for bankruptcy.

    However, the only option that would let you retain possession of the car would be a bankruptcy filing. This is something to keep in mind because you're extremely unlikely to get approved for another car loan any time in the forseeable future.

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    Default Re: Can't afford car payments anymore. Help! :(

    A repo is a repo, whether voluntary or not. It still shows up as a repo. The only thing a voluntary repo will do is save the finance company repo costs.

    When they sell the car and have a negative balance, they will look at all factors in deciding to enforce a judgment against you.

    If you work at the company, can you talk to a manager to see if something can be worked out? (Nothing illicit BTW) It may also hurt you because they know your salary and where you work if they decide to garnish wages.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Can't afford car payments anymore. Help! :(

    Quote Originally Posted by Melonie View Post
    However, the only option that would let you retain possession of the car would be a bankruptcy filing. This is something to keep in mind because you're extremely unlikely to get approved for another car loan any time in the forseeable future.
    That is a big misconception. First, a car loan in an executory contract meaning that while collection efforts have to stop, the debtor-in-possession has to make the current payments if she wants to keep the car.

    Second, a bankruptcy does give a person more capacity to repay a new debt since very little of their income, post discharge, is dedicated to debt service. Given adequate collateral (a reasonable down payment) there are more than a few finance shops that are willing to loan to post discharge debtors. For sure, there will be an increase in the interest rate to compensate for the presumed lack of creditworthiness of the debtor. However, most finance shops realize that they have the debtor for seven years before they can make another trip to court. Car loans being of shorter duration than most, a car loan post discharge is much more common than a home loan.

    HTH
    Z

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    Default Re: Can't afford car payments anymore. Help! :(

    Well I'm pretty sure I don't want to keep the car because 1. it's a SUV so it costs a lot for gas 2. the insurance is really expensive. I don't mind selling the car for far less than the payoff amount because even though I would still be making car payments, at least I'm not spending the money on gas & insurance. Is this the best route to go without hurting my credit?

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    Default Re: Can't afford car payments anymore. Help! :(

    again, selling the car for less money than the outstanding balance of the loan ... and then not being able to make an immediate payment for the shortfall ... is going to hurt your credit !!!

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    Default Re: Can't afford car payments anymore. Help! :(

    Quote Originally Posted by soxysassy View Post
    Well I'm pretty sure I don't want to keep the car because 1. it's a SUV so it costs a lot for gas 2. the insurance is really expensive. I don't mind selling the car for far less than the payoff amount because even though I would still be making car payments, at least I'm not spending the money on gas & insurance. Is this the best route to go without hurting my credit?

    You cannot legally sell the car without satisfying the lien holder (the finance company). In private sells with a lien holder, you normally take the sales money AND the balance of the amount owned, and send it all to the finance company at the same time. They will not release a title without receiving their payout. And the person buying your vehicle will not be able to insure the vehicle without his name being on the title. He will not be able to register the vehicle in his name either.
    Quote Originally Posted by The Snark View Post
    But then I suppose the sort of people who write this kind of crap generally don't allow their opinions to be tainted by things like "facts" and "reality".
    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Can't afford car payments anymore. Help! :(

    Quote Originally Posted by soxysassy View Post
    Well I'm pretty sure I don't want to keep the car because 1. it's a SUV so it costs a lot for gas 2. the insurance is really expensive. I don't mind selling the car for far less than the payoff amount because even though I would still be making car payments, at least I'm not spending the money on gas & insurance. Is this the best route to go without hurting my credit?
    A lot depends on if there is a lien on the SUV's title. If so, you will have to negotiate a release with the bank. If not, sell it now! Use the proceeds to make the payments and buy a bus pass.

    HTH
    Z

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    Default Re: Can't afford car payments anymore. Help! :(

    Ok so I think I understand. Even if I sell the car far less than the payoff amount, it'll hurt my credit because I didn't immediately payoff the entire amount, correct? See what I was thinking was I sell the car less than the payoff amount, the new owner drives away with it, & I just continue to make the car payments until it's fully paid off. I'm assuming this method is not gonna work.

    What about selling it to carmax?

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    Default Re: Can't afford car payments anymore. Help! :(

    Call your auto finance servicing company. Ask THEM for your options. Don't take "there are no options" for an answer (that answer is given by a c/s rep who doesn't know any better). Ask to speak to their Recovery or Default or Workouts department.

    You can say that you heard about such and such an option from a friend, would that work? For some of them, like Bankruptcy, you'll actually hear them rolling their eyes in their heads. But if you mention that you're considering filing BK, they may magically come up with a few more options.

    Here's the thing about Bankruptcy, by the way. You can still lose the car if you don't keep up with the payments, but you won't be held liable for any deficiency (which is the difference between the value of the repo'd car and the payoff amount). That may make filing Chapter 7 worth your while, in the long run. Personally, I'd hate to have to make payments on a car I no longer own...

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    Default Re: Can't afford car payments anymore. Help! :(

    Here's the thing about Bankruptcy, by the way. You can still lose the car if you don't keep up with the payments, but you won't be held liable for any deficiency (which is the difference between the value of the repo'd car and the payoff amount). That may make filing Chapter 7 worth your while, in the long run. Personally, I'd hate to have to make payments on a car I no longer own...
    Additionally, some state bankruptcy laws will actually allow the 'debtor in possession' to keep the car as well !!!

    As to the issue of a 'Title', every car built has a corresponding 'title' to that property (similarly to a property deed for real estate). Legal possession of the 'title' is what constitutes ownership, not possession of the vehicle. In virtually every case except an outright cash purchase (where the title is issued directly to the buyer), the vehicle's 'title' is held in the possession of the 'legal' owner i.e. the finance company. When the auto loan is fully paid off (or resolved to the satisfaction of the finance company), the 'title' is then transferred to the buyer.

    State vehicle registration agencies, auto insurance companies etc. absolutely require that a car's 'title' information agrees with the registrant's information. Thus while it is possible to 'sell' a car without a title, it is NOT possible for an unsuspecting buyer to register the vehicle (get license plates) or to insure the vehicle. Thus the only real value of a car without a clear title is to be chopped up for parts. As such, no above-board auto business is going to be willing to purchase a vehicle without a clear title. And while it is technically possible to privately 'sell' a vehicle without a clear title to an unsuspecting private buyer, when that private buyer discovers that the car he just 'bought' can neither be registered or insured it will only create additional problems for the seller (i.e. potential fraud).

    The bit about covering a shortfall between the actual market value of a car and the outstanding balance of the corresponding car loan is based on the 'legal owner' i.e. the finance company being satisfied such that they will release the title and make possible the actual 'legal' sale of the vehicle to a new owner. In the absence of satisfying the finance company, your options are extremely limited. They basically boil down to A. filing for bankruptcy, such that a judge can rule that the car loan has been satisfied even though it has not been fully paid off, and B. negotiating with the finance company in regard to accepting smaller payments over a longer period of time, or some variant (like reducing the outstanding loan balance)

    In the case of both A. and B., your credit report is going to reflect that you did NOT hold to the original terms of the loan, that you defaulted on the original payment schedule etc.

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    Default Re: Can't afford car payments anymore. Help! :(

    Oy vey It seems I'm in a deep black hole. Ima just swallow my pride & talk to my supervisor of my options. There is no hope for me...

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    Default Re: Can't afford car payments anymore. Help! :(

    Do you know anyone that might take the payments over for you, and you "sell" them the car? Maybe advertise in Craigslist for it.

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    Default Re: Can't afford car payments anymore. Help! :(

    What about trading it in for something that is more cost effective? You will be upside down (which means that you owe more than the vehicle is worth) and they will add the balance to whatever you buy. But, in the long run, if you buy something smaller, you will save money on gas and insurance and you could put the difference toward your car note.

    At least with this solution you will still have a car to drive and your credit will not be affected.

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    Default Re: Can't afford car payments anymore. Help! :(

    ^^^ again not wanting to rain on anybody's parade, but anybody who has been car shopping lately will have found that ...

    A. prices have been heavily discounted, but

    B. in order to qualify for financing the deal needs to have some buyer equity (meaning that net purchase price minus actual trade-in value must be higher than the amount financed). Essentially Zero lenders are still willing to finance a new auto loan balance that exceeds 80% of the value of the car purchased. In this particular case this would mean that the shortfall due on the loan on the existing car cannot exceed 20% of the purchase price of the new car.

    C. in order to qualify for financing the borrower must also be able to verify income as well as having a credit score well into the 700's (which won't be the case if the existing auto loan is already delinquent).

    My younger brother is in the car business, and is freaking out because 2/3rds of his 'willing buyers' no longer qualify for financing ( financing that would have been a 'slam-dunk' a year or two ago ) !!!


    In a larger context, this thread actually brings to light the fundamental change in credit which has caused the economy to decelerate ... the fact that lenders are no longer allowing consumers to simply 'roll forward' their pre-existing debts !!!

    !
    Last edited by Melonie; 12-06-2008 at 12:01 AM.

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    Default Re: Can't afford car payments anymore. Help! :(

    Quote Originally Posted by Mr Hyde View Post
    Do you know anyone that might take the payments over for you, and you "sell" them the car? Maybe advertise in Craigslist for it.

    If that someone misses any payments, and such, it shows up on your record, not his.
    Quote Originally Posted by The Snark View Post
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    Distortion becomes somehow pure in its wildness
    The note that began all can also destroy

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    Default Re: Can't afford car payments anymore. Help! :(

    I did advertise on craigslist to "take over" the payments but the response has been negative. I was thinking about that, trading the car in for a smaller car & adding the amount owned to the new loan but Melonie gives a clear point that is highly unlike to happen.

    This is probably the worst idea ever but I was thinking, apply for a personal loan of $7,000.00 & sell the car for $11,000.00?

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    Default Re: Can't afford car payments anymore. Help! :(

    just sell the car
    and wait for dady to get better t buy u a new one....or get a sugar daddy hunny!!!!!

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