Hi. We have run into quite a bit of problems. It has been one thing after the other, and some rather bad choices. In 2004, we had a car with a small payment. Only $284 per month. My husband decided that he would like a van for our family since we have 4 kids. (The first car was a durango, and I thought fit our family perfectly) But we decided to do it anyways.
So we traded the Durango in on a van with a higher payment. About $400 a month. We were doing fine. My husband had a great job with LOTS of overtime and i worked occassionally. Later that year my brother was having trouble getting a car loan so he could go out and find a job…. and we had decided that we really didn’t like the van… so we decided to give him the van, let him make payments and go get another car loan.
My father cosigned for this new car loan and we got a Durango again. About $380 month. So it went for a few months… my brother making the payments on the van and us making the payments on the Durango. Well eventually that didn’t last and my brother got farther and farther behind on the payments and was not working.
For a stretch of time we were paying both payments and insurance on both.. about $1000 a month. Plus our rent and all of our other bills. We decided to take the car back from my brother and try to trade both cars in for 1 car and 1 payment that would be less.
With some help from dad cosigning again, we owed so much on one of the cars that we had to get a really new car for the loan amount. Anyway our new car loan amount was $550. We were doing that just fine for a while as my husband was still getting tons of overtime.
About 7 months later (this great economy) his work slowed waaaay down and we were really struggling. We eventually got further and further behind and could not make our rent. We moved our family of 6 in with a very generous family member and 3 months later my husband was laid off.
He has had a very hard time finding work, we moved our family to a different county to look for work, with no avail, and recently returned back to where we were. He just lately has found a job, but we are behind on our car payment and we really need to get into our own place again.
I feel that a payment that big could be better used paying half a months rent. I don’t want to ruin our credit so badly that we can never buy a house for a children. They are now getting older and we have all 4 of them shoved into a tiny room at this relatives house. I am just at my wits end and don’t know what to do. To make matters worse, my dad is the cosigner and wants us just to give the car back. I don’t think he realizes what would happen to his credit if we did that. :( Much thanks in advance for your advice.
Should we give the car back and face all of the repo fees? Should we just keep trying to pay it, and living with family members? What should I tell my father?
I think this all begin with sitting down with your father and explaining the reality of what happened when he cosigned. I don’t think he understands this loan and the loan performance is on his credit and the lender will come after him when you can’t pay.
The best solution at this point would be for him to take the vehicle and make the payments himself until you get back on your feet. Since you can’t keep making the payments, he’s either going to have to make the monthly payments or he’s going to have to pay a massive bill, in the tens of thousands of dollars when this vehicle get’s repossessed and sold at auction. Give him the facts, give him a choice.
The other problem is that even if you ditch the vehicle payment it sounds like there isn’t enough income coming in. I’m sure you are trying to increase the income and your husband is looking for new employment.
Please let me know how this goes. I’m sure it will be a difficult conversation but you absolutely owe it to him to be honest and upfront.