Expert: David - 3/8/2009

Question
I purchased a chrysler pt cruser in 2006 in Hawaii. I lost my job because of
the recession. I don’t have any assets, so I have no choice but to try to get a
buyer or repo. I still will owe around 6K if I sell it outright, since I now owe
more on the car than the value, and the blue book has decreased more, since
Chrysler/GM is in the bankruptcy stage, no one wants to consider buying it
outright. There is also not many buyers on an island period. I know if I turn it
in, I will also owe more if they auction this car off, and I will then be sued,
lose my credit, etc. I am also moving to arizona with family to try to get a job,
but cannot spend another $1000 or so, to ship the car, and no job on the
horizon. I only have 8k in cc debt, which I have been on top of, even the car
payments now. Can I explain to the bank about the GM/Chrysler deal and
having no buyers, so they may waive or at least cut my balance without
losing more by auctioning off the car? Or should I just file for bankruptcy? I
dont know how to file for bankruptcy, and very sad that I have to ruin my
credit after so many years of working and doing a great job paying off my
debt. Please help. Aloha Leilani

Answer
leilani,

Many lenders are affording debt repayment options now including auto lenders.  One of my clients called GM and got a 60 day deferral on his Cadillac payment about a month ago.

I can't tell you if BK is right for you.  I do hate to see someone file for BK if all they have is 8K in debt.  I don't know what your earning potential is but that is a fairly small amount to file on.  In the end you have to protect your cash flow.