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What Can I Do About My Car I Can’t Afford Anymore? – Jared

“Dear Steve,

About a year ago I had a great job selling life insurance making a lot of money(to me at least), wrecked my old car, so I needed to buy a new car. After awhile of thinking I had come to the conclusion that for my job I needed a nice car (for appearance purposes) and since I could I would get all of the amenities I wanted. In a little over a week I purchased an ’06 Buick Lacrosse with about everything in it but a DVD player, and around 75,000 miles, for close to 15k. About three months after that some personal issues arose with family and I needed to move from my then current residence in Texas to Wisconsin, where I live now. The problem is I wasn’t able to keep my job (obviously) and there is no viable substitute here where I am at now for income. I did obtain a temp job and struggled for months to make my payments and insurance while still trying to pay my other bills. I have a debt with att that I have no way of paying back due to my current car payment and that is dragging down my credit by the month. I did finally catch up on my car payment but have recently found out that the factory I work at is about to be laying people off(and I’m still only a temp) and there is no other jobs available.

My question is; What is my best course of action? I have looked at and thought of many options, such as, trying to sell the car (I still owe 14k kbb says its worth almost 12)[is it possible to sell the car and have the creditor create another loan taking the place of the deficiency?], voluntary repo, involuntary repo, refinancing, and some people even suggested to me on (please don’t hate me for this) *accidentally* totaling the car for the insurance to pay it off, as I have gap coverage. I would refinance but I really don’t think that will solve my problem at all, only prolong it. Repo has been my biggest thought as with the complications there might be a discrepancy thus creating somewhat of a loophole for me in repercussions.

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Sorry for the complicated reading. I appreciate any help in advance.



Dear Jared,

Your car is what we call, upside-down, meaning you owe more on it than it is worth. In order for you to sell it you’d need to pay off the entire loan to get a clear title.

If you can’t afford to make the payments then inevitably you will get to a point where the loan will be delinquent and eventually they will repo the car.

But I think we need to take a step back here and look at the bigger picture. What we have here is not necessarily a car problem, but an income problem. With the right income you would be able to make the car payment.

I would first contact the lender and see what internal hardship programs they may be able to offer you to give you a break on the payments. The answer may be they don’t offer any but it doesn’t hurt to ask.

I’d focus on replacing your lost income and make that your priority. If you fall behind on the payments, well, it is what it is. You can’t pay what you don’t have.

Eventually they will start to talk to you about repossession and when they do, don’t hide the car or play tricks. It won’t help anything to do that.

If the car is repossessed it will be sold at a public auction for a fraction of what you owe on it. You will then owe the rest between the loan balance and the sales price.

At that time you may have to consider filing bankruptcy to discharge your lingering loan obligation. But let’s not get too far ahead of ourselves here.

Call the lender and focus on a solution for the missing income.

Please post your responses and follow-up messages to me on this in the comments section below.

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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