Expert: David - 8/18/2009

Question
Hello David i have a big problem. I am currently paying 778 a month for a car  150 for insurance. I have 7000 dollars in credit cards and 3000 school loan. I also have to pay rent 350 a month. I have very little left anfter i pay all the bills.I cant even give my wife a dime to pay for every day living expenses(food,Electric,gas bill)she is lost her job and now is only bringing 300 a week) and i could barely buy clothing for my daugther which is 2 years old> I been thinking of doing a voluntary repo, I owe 40000 on the car but the car is only worth 28k.The thing is im think of geting a cheaper car and turning in my current car. What do you suggest?

Answer
Alexi-

It sounds as though you are in a very tough situation.

If you have been current with your auto payments you might want to contact your lender to determine if they can defer your payments for a month or two.  This might help you to breath a bit.

The unfortunate thing with a voluntary repo is that you will still be responsible for any cost/charges owed over what the company sells the vehicle for. The only way that does not happen is with a sale of the vehicle outright.

Another option some consider is filing bankruptcy. That will cover any debt owed (car, credit cards) except perhaps the student loan.  It depends on whether or not that is a government backed or private loan.  If this is the option you are considering be sure to consult with a good attorney.


Hope these suggestions help.

David