Car loan & financial troubles?

Question

I financed a car 3 years ago and at the time I had bad credit, so the car salesman talked my mother into putting the car in her name in order to get the lower APR, which I believe was 8%. They told me to make consecutive payments on time for a year and then it should be no problem to switch the loan to my name. So a year later after I had made all my payments on time I called the credit union who financed the car and they denied my request to switch the loan to my name because my credit score wasn't high enough. So at this point the car is still in my moms name, and due to financial problems, my credit score is probably at the same place it was back then, or possibly even worse. My mom wants the car out of her name and I am stuck, I can barely afford that car anymore. I have recently decided to file for bankruptcy because I have a lot of medical bills and outrageous utility bills that I can no longer handle. I would love to put the car in my name and then file for bankruptcy. cont...

Would this be possible to do? And if so how do I do this? My ideal plan would be to get the car in my name, and a few months later file for bankruptcy, and just give up the stupid car. If I cannot do this then I still want to file for bankruptcy and just keep paying for the car for 3 more years when the loan is paid.

Answer 1

If you are really going to declare for bankruptcy you are going to have to retain a lawer. This would be a good question for him. I will tell you what I would do, If you have been paying on the car for a year you have probably built some equity. If you default on the loan you loose that equity. Equity being the amount that the car is worth less what you owe the bank. You should sell the car and bail your mom out. One thing to consider, did your mom cosign or is it in her name?
If you can't afford the payments you could try to have it financed for a longer term maybe 5 years. If you were able to put the car in your name and then file for bankruptcy they are going to liqudate your assets to pay your debts. which means you loose the car anyway. You should call the people your medical bills are with and work out a payment plan, they would much rather you pay them a reduced amount per month than not pay them at all. You really don't want to declare for bankruptcy. Exaust all options before you file. Bottom line, sell the car, work out payment plans, most states have sponserd debt consolidation advisors. If you do decide to file it will cost at the min 1,000 to retain a lawer for the procedings and he will need that up front since you are a credit risk.

Answer 2

The answer on the car trouble really depends how much you owe on the car compared to the amount you would receive if you sold the car.

If you sell the car and still owe money on the loan, you should get a personal loan to cover the difference. If you credit score is low, you would have to get the personal loan from a family member or friend.

I would sell the car and pay off the loan by any means possible. Do anything you can to keep the car from getting repossessed. If the car is repossessed or you declare bankruptcy with your Mom as a co-signer, they could sue your Mom for payment and ruin her credit.

Answer 3

Even if you could find a way to switch the car into your name, bankruptcy no longer wipes out your debt. With the change in the rules, just means you have to make smaller payments and are still responsible for the debt. Medical bills if you send $5 a month they cannot say anything, utility call them and work something out, and be conservative with your utilities. The car and loan is in her name and right now she is responsible and it will affect her credit. See if you can sell the car for at least what you owe on it, that will help. Go to KBB.com and see what it is worth