“Dear Steve,
I was a public school teacher until health problems forced me to quit teaching so therefore, I retired. The doctors have not given me clearance to return to work; so at the age of 61, I doubt that I will be unable to return. About six months before my health problems began, I traded my vehicle for a 2008 Camry LE. My car payments are $530 a month. When I was teaching, I could afford this payment; but now that my income (retirement) is less than half of what I made teaching, I cannot make it.
I have kept in frequent contact about my situation with Toyota Financial, and I have used all the extensions that they can grant to a person. They also do not refinance. I have checked with two places about refinancing my car, but it would be a loan for five years at 12% interest.
I have no other debt other than my mortgage payment, but I have no health insurance. Therefore, my doctor bills, lab work, and prescription medications are paid out of pocket. I have to pay these bills instead of my car payment.
I have honestly tried everything, and I have exhausted all my possibilities. At least, I think I have exhausted all my possibilities.
Is there anything else that I can possibly do?
Sloane”
Dear Sloane,
First off, I have tremendous respect and admiration for teachers, having been raised by one.
Now to the damn Toyota. The most logical way to reduce the payment would be to refinance the loan and extend the loan to lower the payment. It sounds like you’ve already found some place that will do it but you can also try LendingClub.com and Prosper.com. Both of those groups are peer-to-peer lending networks where people like you and me, lend to people like you and me.
Outside of satisfying the loan to lower the payment the loan will most likely end in a default followed by a repossession. To avoid that you could attempt to sell the car for at least enough money to pay off the loan.
Let’s explore those options first before we dive into less attractive options.
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