My Motor Blew in My Car and Now I Owe More Than It’s Worth. – Danny

“Dear Steve,

The motor blew in my 2008 car. I owe more than it’s worth if it were running. Warranty and insurance won’t cover it as they are saying it’s my fault. The dealer want’s nearly $10 grand to fix it. My credit cards are maxed, @ 2x $5000, and my income is down with the economy. I’m barely making the car payments as is.

My wife’s car is paid off, and we think we can get by with one for now (she doesn’t work, is in school still on loans..) Is it time to think bankruptcy?


Dear Danny,

Thinking bankruptcy is always an option to consider. After all it is a legal court approved solution.

The real issue here is if there is a likelihood you will be able to recover from your current financial situation. The fact the engine blew up does not relinquish you from your obligation to make your car payments. And you did not say you were struggling to make the payments. It sounds to me like the issue is simply that you are now stuck with a car that doesn’t run.

A strong consideration other than bankruptcy would be for you to consider getting a low interest loan to pay for the engine repair. You can do this through Lending Club is a peer-to-peer lending network where people help people in need.

Finding a local lawyer to help you fight the claim with the insurance company and warranty might be a good investment as well.

If you did decide to go bankrupt you’d want to discuss how to deal with the car with your bankruptcy attorney. The attorney might suggest giving the car back in a voluntary repossession, waiting for it to be sold at auction, and then wrap the big bill you will get into your bankruptcy.

Find a local bankruptcy attorney you like and discuss the issue with them. Also, check out and see if that isn’t a better route for you to take.

Please update me on your progress by

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.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

Steve Rhode

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