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I Recently Separated From My Husband but Don’t Make Enough Money. – Nea

“Dear Steve,

Im recently seperated from my husband . I only make enough money to cover bare basic needs.

My mort right now is 820.00, my car note is 320.00 and My car insurance is about 120.00

Im currently in the process of home loan Modification.. which will lower my interest rate by 1.5% . I received paper work from my lender saying if I file bankrupty my modification would be Null and Void.. The only problem I was planing on filing as so as my modification was done to get rid of my car now I cant ..

my take home pay after taxes and deduction is less then 1300 a month… I dont receive child support … My X has recently become disable and not able to help as of right now.. I also want to say that when I first got my loan I was only paying 732.00 and I didnt have a car note the ONLY reason I have on now is my son was in an accident in my car and the insurance wouldnt pay me for my car thats another story… And I needed a car to get back and fourth to work thats the only reason I have a car note..

My escrow account was in the neg for my house that why my house note went up too .

I would like to get rid of my car so I can free up some money so I can sleep at night what options do I have?


Dear Nea,

Specifically regarding the car your options are limited. You can either sell the car for more than the value of the loan so you can get a clear title to transfer, you can continue to make the payments, or you can hand the car back to the lender. If you hand the car back or it is repossessed then the lender will sell the car for you at auction and send you a HUGE bill for the balance due.

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Depending on the amount of your car payment and your cash flow crunch right now it might make more sense to consider bankruptcy to eliminate the car payment and hand the car back. I think the loss of the car payment would be greater than the reduction in your mortgage from a modification.

Do you have another way to get around without the car?

You might also want to look into what government benefits you might be eligible for to help you make ends meet.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


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About the author

Steve Rhode

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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