We Fell Behind in Car Payments. Can We Settle the Debt and Keep the Car? – Patti

“Dear Steve,

Purchased a car in 2006 for son in college. Made payments until last year and fell behind. Still have car and need to settle balance.

We purchased a car for our son in college and fell behind in the payments. We owe 3980.00 total. After checking our credit report I see that they have refered it to a collection agency. We can make a settlement payment, but what would be a good offer? We fell behind do to time cuts on my husband’s job and medical bills. My thanks in advance!


Dear Patti,

Well the issue is that the car loan is probably secured by the car. In that case, if the loan is delinquent then it may be repossessed.

You can certainly try to negotiate a settlement but in this particular situation you might want to ask the lender for an offer first. If they did make an offer it would be unusual. I can’t remember if I’ve ever seen such a settlement before and the lender let’s you keep the car.

Is the loan secured by the car?

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