Greg wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.
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“Dear Steve,
Car payments and car insurance are killing me financially!
I don’t know what to do on my car payment anymore? I’m getting financially stressed! Its extremely high and I pay high interest, plus I have another car I owed on and traded it for this new car and what was left on the loan? Was tacked onto this one.. I’m thinking very seriously about going to bankruptsy to get out of it?
By the time I pay this car off? I’ll have 42,000 dollars into a 18,000 dollar, this is on a 6 year note, the car is a Ford Fusion S.. I’ve already payed a year on this car and I’m living pay check to pay check plus I’m opening new credit cards to live on and survive off of because of these big payments along with the 82.00 a month full coverage insurance.. I even thought of letting the car go back? Instead of doing the bankruptsy?
Greg”
The Answer:
Dear Greg,
Dude, you are way upside down on that car loan and in a debt death spiral if you are taking out cards to pay bills. When you traded in that other car with the negative equity you just wound up rolling the debt forward and now you owe way more on your car than it is worth.
The path you are on right now is not sustainable. Bankruptcy would allow you to give the car back and not have a huge bill, that would otherwise be due.
Giving the car back alone as a solution here, really isn’t an option.
Rather than be afraid of bankruptcy, go talk to a local bankruptcy attorney or click here for a free bankruptcy consultation. It certainly sounds like the right thing to do.
