HELP! Credit Union threatening to take our cars since we fell so far behind!?

Question

We have 2 loans for our 2 vehicles (1998 Ford Ranger Truck & 2002 Dodge Caravan). Both loans have alot of other things rolled into them and they both total around $30,000. Our cars obviously are not worth the total of the loans. They said that if we cant come up with the $2500 to bring them current we would have to give them back. We just relocated out of state from MI to SC. Any advice?? Yes they have our new address (woman I spoke to said we could work something out so I stupidly gave it to her). What about chapter 13? Should we sell them and give the credit union the cash and try to get other vehicles? I currently have 3 books on how to fix your credit so if we could do this as softly on our credit as possible thats the way we want to go. ANY advice would be appreciated.

Answer 1

Hear car is not sold. Bus and subway also very convenient.

Answer 2

Tracy,

From what you said, the two cars are not worth the total of the loan so there is no way to sell them unless you can pay off the remaining balance to clear the title for the sale.

If they repo the cars and sell them, you are liable for the remainder of the loan above what they sell the cars for. For example if they only get 20,000 for the 2 cars, you are still responsible for the other 10,000 owed. Therefore they can still get a judgment against you for that.

Bankruptcy, while it is an option, stays on your credit for 10 years. If you can get them to work up a payment deferral on at least one of the payments and work something out about catching up the rest, say a second loan for the amount overdue, this may be a way to avoid bankruptcy.

However, if things are still bad enough that you can't afford the payment on the cars, I wouldn't suggest adding another payment. Even if you didn't give her the new address, trust me, you don't hide from bill collectors. You can bet that if you get stranded on a desserted island, once the bills are past due, you will be found! LOL.

Consider talking to them about the possibility of refinancing in order to bring your account current and hopefully lower the payment to something that you can afford.

If all this is not possible, I would only be able to suggest contacting a debt councelor to see if they can negotiate something for you.

I wish you all the best!
Bonnie Ramsey

Answer 3

This is going to be very tough. Your only choice is to bite the bullet. If they repo those vehicles, they will sell them cheap at auction and you will still owe the balance plus all the fees. You will probably owe almost as much as you do now.

If you sell the vehicles, you will still have to come up with the difference which would probably be less but you won't be able to give clear title to the buyers till you pay the loans off in full.

I assume you are behind on more than just these vehicles. You want to check this site: http://www.nfcc.org/ . Consumer Credit Counseling Services (CCCS) offers free counseling. They can look at all your finances and advise how to proceed. You may very well need to file Chapter 13 bankruptcy.

Answer 4

What I would do in this situation is take the vehichle that you use the least and sell it on your own through using a classified ad in the paper, and, or hanging up signs in your local supermarket. When you sell that vehichle, use the proceeds from this to pay the credit union what you owe them to become current. Sure you will be paying for something you no longer own, but its better then a repo on your credit report, and this way it gives you a chance to get caught up. Maybe now one of you will have to carpool to work, drive the other to work, or take public transportation for a while until more money is available to buy a USED car without a monthly payment.

Answer 5

There isn't going to be anything you can do to stop the process in time to keep from losing the cars.

It was not a smart financial decision, to just keep rolling debt into the car loans, as you are now learning. I can't even imagine how high of an interest rate you have on the cars.

It will be a long time before you can buy another car, and you'll be stuck with a high-interest "buy here, pay here" dealerships until you can pay off the debt...b/c even if they reposess it, the balance that the sale doesn't cover you are STILL responsible for.