Its a 2007 Honda Civic EX i owe about 21,000 on it, i dont think anyone would by it because they could go to a car lot and get one for 19,000. my credit right now is very good for my age(21) i know having it repoed or filing bankrupt will hurt my credit i just want to know how bad and which one would be better repo or bankruptcy.
2007-10-10 15:56:07 · 6 answers · asked by trixi 1 in Business & Finance ➔ Credit
Whether you voluntarily return the car or they repo it. The results are the same. The car gets sold at really cheap at auction. You will be responsible for the loan balance plus all sorts of fees. You'll end up owing almost as much as you do now. And your credit will be completely trashed.
It's very unlikely that you can qualify for bankruptcy.
Sell the car for as much as you can get out of it and pay of the difference. It will be cheaper than the repo.
Of course, you could put yourself on a strict budget and get a second job and pay your debt.
2007-10-10 16:28:11 · answer #1 · answered by bdancer222 7 · 0⤊ 0⤋
Sell the car and use the funds to pay down the debt. Always try to sell it even if you think that someone can get a better deal elsewhere. Sometimes people want a specific car and they won't settle just for what's at the lot. List the car on craigslist. I just sold a 2000 Jetta on there. You could even take the car to a consignment dealership and they can try to sell your car at retail value so you can pay off all that you owe.
Either one of the options you listed will hurt you. Bankruptcy should be a last resort choice. Your credit history will be blemished for around 7 years if you file. You would also have to deal with some legal court stuff. Repo is never good too. You don't want collection problems. You'll still have to pay a good amount if the car gets repoed. Don't jump to the last resorts when you have so many other options.
2007-10-10 16:36:37 · answer #2 · answered by oceanpotion™ 3 · 0⤊ 1⤋
Well both are going to be bad, but in terms of your credit report the Bankruptcy will have a longer term effect.
Now, you may not even qualify for a bankruptcy. There are specific guidelines in order to file. So that may not even be an option for you. It if is, you can expect to pay about $1800-$3000 to file for the bankruptcy.
As for the Repo. They will sell the car at auction, but it will be for much less than it is worth. So if it is worth 19K, they will probably sell it for around 14K. You will still owe the difference between the amount they sell it for and the loan balance. If you don't pay that you could eventually be taken to court for the money.
An alternative might be to attempt to sell the car on your own. If you think you can get 19K for it you would still have to come up with the 2K to pay the loan off in order to get the title. But this is a lot less than if they sold it at auction. In the long run this also helps you because it will show a paid off loan.
2007-10-10 16:30:29 · answer #3 · answered by OC1999 7 · 0⤊ 0⤋
First understand that you probably won't even meet the critieria to file bankruptcy so, if you file your car will be protected until the bankruptcy is discharged by the courts. Why can't you afford the vehicle? Have you considered a second job, or have you lost your first job? Provided you have no other choices I would recommend you voluntarily turn the car over to the bank by dropping it off at the branch you bank with. The will sell the car and you will be responsible for what is not covered from the sale. You're young and in a few years your credit will be a little better. Just don't make the same mistakes again, learn from this and don't buy another vehicle on credit. Yes, buy a beater with cash money!
2007-10-10 16:12:24 · answer #4 · answered by logicboy 3 · 0⤊ 1⤋
Bankruptcy should only used as the avenue of last resort. In addition, I don't believe cars are protected under bankruptcy, primary housing maybe, but I don't believe cars are.
Second, now days, most quality companies won't even hire you if you have bad credit. So if you're young, I don't recommend it since it can disqualify you for a good deal of jobs.
Third, If they repo it, they'll lose money on the car too. It's better to call your loan company and re-negotiate the terms. Such as stretching the loan term to lower payment, lower the interest rate, etc. Some companies may be willing to renegotiate since they can continue to make money on the car instead of the taking risk on repo and auction process.
Final piece of advice. Naturally, take care next time not to get in over your head. Regularly read financial sites to keep on top of things.
2007-10-10 16:22:13 · answer #5 · answered by amorde 3 · 0⤊ 1⤋
bankruptcy will have to be a court thing you will have to go through and the repo they will just come and take the car but all together i do believe filing bankrupt is the worst of the two
2007-10-10 16:04:32 · answer #6 · answered by trevorc_13 2 · 0⤊ 0⤋