I Recently Became Late on Several of My Bills Including Two Car Loans. – David

“Dear Steve,

I recently became late on several of my bills including two car loans. I maxed out a credit card to cover me when my wife become unemployed and pregnant. She has been unable to gain employment since then. I purchase a 2009 Dodge Caravan several months ago and now may have to relinquish it to the lien holder soon or sell it. My 2008 Honda Civic was up to date on payments until recently and now a month behind. I am approximately over $40k in debt with the car loans.

My baby will be born in March and must need all the money I can get.

What can I do if I get behind on my car payments and swamp in additional debt such as credit cards? How bad will a repossessed vehicle hurt my credit? Will I be able to fix my credit if a vehicle is repossessed?


Dear David,

Well a repossession is not great but the worst part will be the big bill they will come after you for when they sell the vehicle at auction of a tiny amount and will want you to pay the difference between that and the loan balance.

Handing the car back does not end the problems.

If the problem is just one of cash flow and you need to keep the two vehicles to get around then click here to contact a local bankruptcy attorney and talk about a Chapter 13 bankruptcy. Under a Chapter 13 bankruptcy you could keep the cars, make the regular payments and pay a greatly reduced amount on your unsecured debts.

If that doesn’t work for you then you can talk to the bankruptcy attorney about how to discharge the big bill they will come after you for if the car is repossessed. This might be the better approach if your wife is not going to work after the baby is born or she is going to work but daycare is going to be really expensive.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.
Damon Day - Pro Debt Coach

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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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