Can't Make Car Payment - Bankruptcy or Repossession?

[cheez]

Hi guys,

I have a car that I am unable to keep up with the payments. I owe money on the car and still have 2.5 years left to make monthly payment. The car is worth around $5000. I haven't checked, but I think I still owe $8000. Can I have bank to repossess my car by telling them I can't make payments anymore? Or do I have to file bankruptcy to do this? How and what will affect me? I'm new to this. What complications will I run into if bankruptcy is the only choice.

Let me know guys. I've been serious financial troubles.

Thanks

 

[dullard]

If this is your only debt, then bankruptcy over a $3000 net debt is silly. It'll cost you that much or more to go through the bankruptcy process.

Best bet is to talk to the bank and see if you can work out a plan that you can pay off. Then increase income and decrease spending. $3000 is not that impossible of a goal to generate.

 

[BoomerD]

If you owe more on the car than it's worth and the bank repos the car...you'll STILL owe the bank for the difference between what you owe them for it and what they sell it for...for example...you say you owe them $8000 and the car is worth $5000...so they'll probably wholesale it or send it to an auction where they'll get $3000-$3500 tops...you'll still be on the hook for $4500-$5000.

 

[SearchMaster]

If you owe more on the car than it's worth and the bank repos the car...you'll STILL owe the bank for the difference between what you owe them for it and what they sell it for...for example...you say you owe them $8000 and the car is worth $5000...so they'll probably wholesale it or send it to an auction where they'll get $3000-$3500 tops...you'll still be on the hook for $4500-$5000.

And to add insult to injury....

If you're able to get them to forgive some or all of the difference (since they can't get blood from a stone), I think they can 1040 you so that you owe tax on what amount they forgive.

 

[SearchMaster]

Agree with Dullard - bankruptcy over $3K is stupid and will impact you for the next 7-10 years. Can you not get a part-time job delivering pizzas, ubering, or some other way to bring in a few hundred extra dollars a month? Sell everything you have that you absolutely don't need...on the bright side it's a small hole so you should be able to pull yourself out of it.

 

[cheez]

If this is your only debt, then bankruptcy over a $3000 net debt is silly. It'll cost you that much or more to go through the bankruptcy process.

Ok thank you for the info that helps. So repossessing the car and bankruptcy are two separate things then? I didn't know.

Best bet is to talk to the bank and see if you can work out a plan that you can pay off. Then increase income and decrease spending. $3000 is not that impossible of a goal to generate.

Easier said than done. $3000 may seem easy to you but it's a nightmare and overwhelming for me. I can't even keep up my apartment rent and I am looking to move out to the wilderness and live in a camp. Rent and car payment are the two biggest nightmare for me. I can deal with the credit card payment (I only have one) and it can easily be handled.

If you owe more on the car than it's worth and the bank repos the car...you'll STILL owe the bank for the difference between what you owe them for it and what they sell it for...for example...you say you owe them $8000 and the car is worth $5000...so they'll probably wholesale it or send it to an auction where they'll get $3000-$3500 tops...you'll still be on the hook for $4500-$5000.

I really think my car can be sold by a lender for more than that, way more than that. The purpose of me trying to get rid of the car is to not having to make payment. If you say I will be on the hook for $5000 that means I have to open up a freaking loan to just to pay that. This would lead me to bankruptcy.

 

[cheez]

And to add insult to injury....

If you're able to get them to forgive some or all of the difference (since they can't get blood from a stone), I think they can 1040 you so that you owe tax on what amount they forgive.

You are adding fire to the gasoline then cause I will be owing around $400 on my tax return for last year due to penalty I have to pay for not having health insurance. Next year is gonna get worse and they add more tax on the forgiveness then I will owe much more money.

 

[cheez]

Agree with Dullard - bankruptcy over $3K is stupid and will impact you for the next 7-10 years. Can you not get a part-time job delivering pizzas, ubering, or some other way to bring in a few hundred extra dollars a month? Sell everything you have that you absolutely don't need...on the bright side it's a small hole so you should be able to pull yourself out of it.

I can't deliver pizza. I won't be able to do that kind of job. I have nothing of value in personal belonging. It would be better if someone could buy my damn car so I won't have to owe money. I am so stressed.

 

[dasherHampton]

You can barely afford to live and you owe $8000 on a car you're upside down on.

Let me guess: You went to one of those "bring your last two pay stubs and we'll finance you a vehicle for twice what it's worth at 25%" places.

Don't worry - it'll all resolve in one way or another. You won't go to jail.

The only thing that matters is that you learn from this. Don't be like most Americans and go through life stupid about money.

 

[BoomerD]

Ok thank you for the info that helps. So repossessing the car and bankruptcy are two separate things then? I didn't know.


Easier said than done. $3000 may seem easy to you but it's a nightmare and overwhelming for me. I can't even keep up my apartment rent and I am looking to move out to the wilderness and live in a camp. Rent and car payment are the two biggest nightmare for me. I can deal with the credit card payment (I only have one) and it can easily be handled.



I really think my car can be sold by a lender for more than that, way more than that. The purpose of me trying to get rid of the car is to not having to make payment. If you say I will be on the hook for $5000 that means I have to open up a freaking loan to just to pay that. This would lead me to bankruptcy.

Your lender isn’t a car lot. They won’t generally spend the time and/or money to detail the car and/or do any needed repairs to increase its value. They generally just send them to auction.

Do you work? Can you get a part time job to help pay your bills?

 

[deadlyapp]

You have a car, why don't you uber or lyft or something? Post your car for sale for someone to take over your loan payment. Refinance the car to a longer term loan at a higher interest rate but lower monthly payment. You have a computer (obviously) why don't you sell it? You have an apartment, so you must have things inside the apartment. Sell them. Get rid of the apartment and couch surf or camp or whatever and put that money towards the car (or live in the car).

There's lots of options.

 

[dasherHampton]

or in a van down by the river.

 

[ElFenix]

Ok thank you for the info that helps. So repossessing the car and bankruptcy are two separate things then? I didn't know.


Easier said than done. $3000 may seem easy to you but it's a nightmare and overwhelming for me. I can't even keep up my apartment rent and I am looking to move out to the wilderness and live in a camp. Rent and car payment are the two biggest nightmare for me. I can deal with the credit card payment (I only have one) and it can easily be handled.



I really think my car can be sold by a lender for more than that, way more than that. The purpose of me trying to get rid of the car is to not having to make payment. If you say I will be on the hook for $5000 that means I have to open up a freaking loan to just to pay that. This would lead me to bankruptcy.

*I AM NOT YOUR LAWYER THIS IS GENERAL ADVICE CONSULT WITH A LAWYER ABOUT YOUR SPECIFIC SITUATION*

you're probably judgment proof. there's a good chance that if they repo the car they won't file suit on the debt (because it's not worth their attorney's fees to do so), which means it becomes legally uncollectable once the statute of limitations expires (and in most places the SoL will be started when the lender accelerates the debt and repos the car). they might sell it off to shady debt collectors who will try to collect even after it's uncollectable (which can actually make money for you in certain circumstances).

do not lock the car up or try to hide it somewhere, because then they'll file suit on the debt if they want to repo it. do not attempt to confront any repo men, because then they'll file suit to repo it. under your contract with the lender they almost certainly have the ability to repo it themselves without involving the law (it's called "self help"), but they cannot breach the peace to exercise that ability. your best course of action may be to coordinate a repo.

so, you have alternatives.

***AGAIN I AM NOT YOUR LAWYER, I DO NOT KNOW YOUR SPECIFIC SITUATION AND PLEASE CONSULT WITH ONE IN YOUR JURISDICTION***

 

[dasherHampton]

I'm not a lawyer but I wouldn't count on them not trying to collect on this. But you can't squeeze blood out of a turnip.

This is a person with underlying life issues that need to be fixed.

 

[crashtech]

Go talk to the lender and explain that if you can't come to some kind of payment arrangement with them, they'll end up with a repo that they really don't want.

 

[zinfamous]

We have a member here with something like 5 houses, all stuffed with Legos. I wonder if he is looking to hire a live-in sentinel for his Lego stash?

But seriously, good luck. Sell everything you can that you know you don't need, consider living in that car for a spell if you can manage it.

 

[dasherHampton]

OP - why don't you just go OTR for a few years?

It won't cost you a penny. Trucking companies are desperate for drivers and will pay for your CDL and give you a decent sign on bonus, plus you'll get benefits right away. If you're reliable you'll make 70,80 grand a year in no time.

Sure, it's not a great job but you need to get your income up. Just save up a nest egg and then restart your life.

 

[DigDog]

this is the very reason Uber exists

 

[zinfamous]

this is the very reason Uber exists

Uber is rather strict with the type of car you can use, though. You also have to fiddle with your insurance (will become more expensive). If his car is too old, not in proper shape, etc, Uber will disqualify him. You actually have to jump through some hoops and isn't always great for everyone. But--you can get up to $250, I think, in monthly gas rebates and free car washes. This depends on availability in your area, though.

 

[AdamK47]

I thought your Coconut Audio business was thriving. What happened?

 

[dullard]

Ok thank you for the info that helps. So repossessing the car and bankruptcy are two separate things then? I didn't know.

Easier said than done. $3000 may seem easy to you but it's a nightmare and overwhelming for me. I can't even keep up my apartment rent and I am looking to move out to the wilderness and live in a camp. Rent and car payment are the two biggest nightmare for me. I can deal with the credit card payment (I only have one) and it can easily be handled.

Yes, repossession and bankruptcy are separate things.

In bankruptcy, generally they can't take your car away until the legal proceedings are done. But you might end up with absolutely nothing to your name and 7 to 10 years of no ability to buy anything on credit. And you'll likely have to pay thousands of dollars (filing fees plus attorney's time).

With a repossession, they take your car away (when that happens is up to the bank) and send you a bill for their losses. You'll also have to pay taxes on those losses. Your credit will be hurt with a repossession, but probably not quite as much as with a bankruptcy.

Both are bad options. Better options are to try to work with the bank, or try to improve your finances. Can you sell any of your audio/Apple equipment? Can you work minimum wage on weekends (just 6 months of that would solve this car payment problem)? Can you donate plasma (would take ~8 months)? Can you ask for a raise? Can you ask for more hours? Can you drive an Uber in your spare time? Can you get a roommate? The list keeps going. Heck, can you get your food for free at a food pantry/charity, as that will save you that $3000 in about a year?

 

[AdamK47]

I thought your Coconut Audio business was thriving. What happened?

Nevermind, I found out why. I always believed in your audio cables.

 

[madoka]

If that's you on the video, then what happened to the hundreds of thousands of dollars you spent on cables? Did you already sell those? And your pool table?

Do you have any disabilities or criminal record that prevent you from driving for uber or delivering for Amazon or a restaurant?

Assuming you sold everything you can, I would move out and live out of my car. Park at a 24hr Walmart, which gives you access to the restroom. Use a cooler with some ice. That's your refrigerator now. I know that Starbucks throws out an insane amount of food every night. I'd go dumpster diving there. It's all prepackaged sandwiches, meals, and pastries. Hell, I think about doing that now as it is.

Then I'd go get a job and start rebuilding my life.

 

[Pick2]

... I'd go dumpster diving there. It's all prepackaged sandwiches, meals, and pastries. Hell, I think about doing that now as it is. ...

I can just picture a New McLaren pulling up , the driver standing on the rear spoiler and doing a swan dive into the dumpster , emerging on the far side with a sandwich in their mouth.

 

[Kaido]

Can't Make Car Payment - Bankruptcy or Repossession?

...

Let me know guys. I've been serious financial troubles.

...

I can't even keep up my apartment rent and I am looking to move out to the wilderness and live in a camp.

...

I can't deliver pizza. I won't be able to do that kind of job.

Okay, let's rewind for a minute here. You're capable of posting a coherent thread on a technical forum on the Internet, and yet you're seriously considering living in the woods? That skill alone lets you into like 80% of the jobs in America...being able to communicate clearly in English & use a computer, that is. Are you willing to share some background on your current story, or do you solely want financial advice about your car right now? Because there are a TON of available resources for people in bad financial situations. Those types of situations are only forever if you quit life & go and hide in the forest.