A Friend of Mine and I Bought a Car. She Quit Making Payments and I Can’t Afford it. What Can I Do? – Nate


“Dear Steve,

A friend of mine and I bought a car last year valued at $35,000 for $30,000 out the door. Within the last year the price had dropped to half the amount owed on the loan. She decided to quit paying on the car and left me with the bill. I have the car in my possession currently and am unemployed. The balance owed on the car currently is over $31,000 because of interest. I have tried to get the car refinanced with out success.

Any suggestions?

Thank you


Dear Nate,

Your friend really screwed you over. Sorry to hear that.

With no employment you are facing a repossession of the vehicle which will result in the sale of the vehicle at a public auction for a fraction of what you owe on it. You will then get a huge bill, probably for $20,000+ that you will not be able to pay. Bankruptcy will be your next stop.

If you had money coming in you could consider a bankruptcy now and see if the loan amount could get crammed down. Sometimes the loans can be reduced to the current value of the car.

If your friend signed for the car loan as well, the lenders will go after them also when you can’t pay.

The minute you drive a new car off the lot is is worth less. It went from a new car to a used car in the matter of 10 feet. Last year’s models will be worth less and people in loans for the new car cost will be left upside down or underwater, owing more than the car is worth.

Best bet is to buy a three year old used car to get the advantage of the value drop but the car is still relatively new.

Nobody is going to refinance an underwater loan. Especially since you are not employed.

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You choices are to either hand the car back now or go and talk to a local bankruptcy attorney to see if there is any way to keep the car and get the loan value reduced in a cram down.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

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