Voluntary repo of vehicle?

Question

okay first I don't anyone to bash me or say anything bad.I'm just looking for advice. we got an 07 dodge caravan in january and we traded in my 05 equinox because it was horrible on gas. we were still almost $11,000 upside down on the equinox and I know we made a HUGE mistake. now I owe like $27,000 on the van. the interest rate is like 15% we have decent credit (low 600) i guess that's decent. anyway my husbands overtime got cut at his previous job and that set us into a whirlwind of past due bills. now he has a new job paying more but still no overtime and we are still 2 pmts behind on the van. I was wondering how it would work if we did a vol. repo on the van and just dealt with the remaining balance. I learned my lesson and would be very happy with a cheap ol car. how would that work also..I would want to spend around $3000 on another car. I can't go w/out because I have kids and we live in the woods basically. my husb has his work truck but we couldn't all fit in it. Advice?

I was also thinking of just going bankrupt. I did the math and after all the bills are paid each month we only have $450 left over. that's to buy groceries and baby needs and of course GAS. the van payment is $600/month. could I refinance the remaining balance? I'm going crazy with all of this and believe me I wish I could go back and keep the equinox though the payments were $450 it still drank us up in gas.

Answer 1

The first thing to do is to get up and go hug your husband and your baby. Then when your through hug them again. Your not in as bad shape as you think that you are. Your in a pickle but you have some great things going for you. You definitly have your head on your shoulders. It sounds like you have a pretty good income to pay the car payment, mortgage, utilities and still have 450 a month. Next you realised your problem quickly. The van is still close to new so will have most of it's value still there.
The most difficult part of the whole thing will be dealing with the crazy credit system. Sure they will give you a 27000 dollar loan on a 16000 van but they are going to balk at you when you ask for an loan just for the 11000 without a new car attached to it. Look at it this way. Insurance will not cover the van for more than it is worth. So if you totalled the thing all that they would pay is the 16000. In essence the 11000 is already unsecured debt. What you will have to do is try to find a couple of people with brains that will understand what you are trying to do. You'll need a loan officer that sees that you are trying to get out of debt before you have to go into collections.
Definitly do not let it get repossesed. When that happens all controll that you have on the situation is lost. You feel helpless now it will be even worse afterwards.
Also do not file bankruptcy. No matter what it does to your credit it will be horrible on your marraige.
So you need to sell your minivan. Find someone to lend you the difference plus a few thousand for another car.
Here is the best thing yet. You have felt the pain of the car payment. Your a bright person and you will be able to see the benefits of having your car paid for. Once you have your car paid for no one can ever come and get it from you. If you ever have a slump again you will never have to worry about the payment or the repo man. That is security. That is freedom. Just take that car payment that you would be making and save it. This will pay for repairs to the car and allow you to save to pay cash for your next car. When you have cash on hand you can spot a deal and jump on it. I just bought a 2001 mazda mpv for 4000 because I had the cash saved for my next car. Just 300 a month is enough that will open up that other 300 that you were spending for your budget. Normal is broke with payments. Be weird.

Answer 2

The answers which stated that a voluntary or non-voluntary repo are treated exactly the same are correct. You need professional credit counseling. I suggest going to your local branch of Consumer Credit Counseling. They are a non-profit organization that is listed in your phone book.

Now I have a suggestion that you won't find in any book. I suggest that your car dealer may have inflated your income, or otherwise did some creative writing on your credit application, without your knowledge. In fact, I would bet on it. Most lenders would not have approved this loan for someone in your position. If the dealer did this fraud, you may be able to unwind your deal. Since your trade is long gone, the dealer will have no choice except to give you the money they "allowed" on your trade. This is undoubtedly more the real value. It may even be more than the payoff. The first thing I would do is call the lender. Tell them you want a copy of your credit application. If they try to tell you that the dealer should provide it, tell them you have reason to believe that the dealer may have altered it. Check the application for anything that the dealer may have misrepresented. The dealer only makes money when he makes a delivery so he has motivation to "enhance" your information. If he indeed changed your application, tell the lender and see what they recommend. If it is the factory lender (i.e. GMAC, Chrysler Financial, etc.) they may have some influence on the dealer. You may have to speak to an attorney.

The third thing that you should do is look at your loan paperwork from dealer. You should cancel anything that you purchased, either knowingly or not, like warranty, gap, credit life, disability, tire coverage, etc. These refunds will be sent to the lender and will reduce your pay off. You may be able to negotiate with the lender to refinance the lower amount. That's if you don't unwind the the original deal.

Feel free to contact me if there is something you need clarified.

Answer 3

Any Repo volunatary or not is treated the same. The only thing worse on your credit report is a Bankruptcy. When they Repo the car they will sell it for a lot less. You will still owe the difference between the balance and what they sell it for. So if you owe $27,000 on the loan, they will probably sell it for $10,000. This means you would still be responsible for the remaining 17K. If anything see if you can sell the van yourself and come up with the difference to pay off the loan. You will be able to sell it for more than they will when it is Repo'd.

Depending on your exact expenses, you may not qualify for a Chapter 7 bankruptcy. You will probably be moved into a Chapter 13, which is a repayment plan. One of the requirements for a Chapter 7 is your lack of ability to repay a set amount over a period of time. You should talk to a bankruptcy attorney to see what you would qualify for. Most give a free consultation.

Answer 4

A voluntary repo is just as bad on credit as a mandatory repo. I have a friend that is trying to file bankruptcy right now, they have 240 dollars left after bills for the things you mentioned. They are also in debt about 480,000 dollars. Yes, they do have a house that is about 200,000 but the rest is real debt, credit cards, cars, loans, etc., and they are having a very hard time filing. They definatly won't get a chpt 13, but a chpt 7 is still in the works. It is very hard to get a bankruptcy now.

Answer 5

I agree with the first two posters, repo's are bad news.
As much damage that repo's do to credit, I put them right up there along with bankruptcy and in some cases, in my opinion, they could actually be worse than bankruptcy.

OC1999 is usually right on the money but I think he forgot to factor in the fact that you rolled over your equinox onto the caravan. So his deficiency balance figure is a bit off.

Repo's generally sell for around 1/3 to 1/2 of what the vehicle is worth, not what you owe.
Without knowing what the caravan is worth, just a guess by what you owe (less the $11k) is $16k.

So the vehicle might sell for as little as $5000. And if you are lucky it may sell for $8000. Again, without knowing what the vehicle is actually worth, this is just a rough estimate.

So you could be left paying some where around $19000 to $22000. Not including any fees. Even if you turn it in there are still fees for prepping the vehicle for sell, transporting the vehicle to the auction site, etc.

If you don't pay the deficiency they will probably sue, especially for that amount of money. So then you would have to factor in court costs and paying their attorney fees.

You could easily end up with four seperate negatives listed on your reports.
One for the original loan charge off
One for the deficiency balance
One for a collection agency (possible not always probable)
One for a judgment (possible not always probable)

Everything will be on your reports for the next 7 years except the judgment - that can last longer.

Since you are so far upside down, I doubt that you would be able to sell it without still having a large amount left to pay out of your own pocket.

You might sit down with your lender and discuss your options. Many lenders would rather work with people than have to repo - though there are some that could care less if they have to repo.

If you can't work out something with the lender, then you might speak with a bankruptcy atty to see what your options are.

Answer 6

Usually anytime you finance with money owed on a trade in you are charged high interest. I was charged 12% interest for being 2,000 upside down on trade credit score was 760. At this point you may be able to work out arrangement to have those payments put onto the end of loan. Bank probably really dont want vehicle back due to loan to value. Even if vol. repo it will count agaisnt your credit. If do repo find cheaper car to purchase first.

Answer 7

Adding to bddancers post which is correct, your friend can file bankruptcy to stop any garnishments or liens on property, but, they will look at the total household income. This could affect them if they make too much money per the median income in bankruptcy to file a chapter 7, leading to file a chapter 13 payment plan, which runs 5 years, sometimes 3 years depending on income. If they meet the median income to file a chapter 7....his debt will be wiped clean and stop all garnishments. Suggestion.....most bankruptcy attorney's will see you free the first consultation, they need to speak to an attorney and bring the balance due paperwork and when filing for the bk he would have to include all his debts per the new bankruptcy laws, he can't pick and chose what he includes in the filing as they used to years ago. Good Luck!