Can I Just Hand My Car Back to the Lender Since I Can’tAfford It?


Dear Steve,

I am upside down on my Nissan financial loan – I owe 17,000 – 2017 Altima is worth about 5000 per my research – payment is 560 month – I am 63 yo – I am no longer concerned about my credit – I get widow benefits from social security and on unemployment due to virus.

I would better serve myself if I could default – pay cash for another car, thus no payments – do you know their repossession process, and what can they do to me other than reporting it on my credit.



Dear Deborah,

If they don’t agree in advance to accept the car back and not go after you for any remaining balance, they could sue you following a repossession.

The way it works is the lender gets the car back; it is sold cheap at an auction, the lender sues the consumer for the difference between the tiny auction price and the remaining balance due.

The more permanent approach would be to hand the car back and then file bankruptcy to terminate any liability. But that really depends on how much debt and what other liabilities you have.

If you were going to live on Social Security and not work again, you could attempt to claim you are judgment proof once they sued you and won. A group like HELPS can assist you to fend away the collectors.

Another factor would be if you had any assets a creditor could go after.

Handing the car back might be a good strategy, but I would strongly suggest you find a good local bankruptcy attorney and have a free discussion about what bankruptcy would mean for you. Bankruptcy is the fastest way to get a fresh start for the least amount of money.

I see a way forward, but you need a bit more information to make a good decision for your situation.

See also  Is My Repossessed Motorcycle Debt a Legitimate Debt? - David

Post an update in the comments below after you talk to a bankruptcy attorney.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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