AboutDavid Expertise I can help answer questions on how to raise credit scores. I can educate you on all areas of credit scoring. My specialty is helping people recover from Bankruptcy and low credit scores quickly.
Experience I own a credit repair company and have helped hundreds of my clients raise their scores to purchase homes, cars and qualify for other loans.
Education/Credentials My background is in Financial planning.
Question I am helping a friend, Rhonda, who is in debt with credit cards (about $45k) and car loans. She is now on a budget and enrolled in a debt management plan (DMP) thru CCCS/MMI. She brings home around $28k yearly and has a disabled son who earns around $10k plus another $10k in SS benefits. One last problem is a vehicle she she just bought within a years time. She cannot afford the payments in any way. The loan bal. is $9500 at around 16% interest. Their is a second lien of around $1500. The value of the car is only $5000 per Kelley blue book. She can't get enough money by privately selling and the 2nd lien holder won't release. If she surrenders the car I know she owes the balance of both loans, however, what would be her options? She is buying her house, but it has zero equity. Ridding her of this car will put her on the road to financial freedom in 44 months. Longer with the extra debt, but still, the road is in sight.
What are Rhonda's best choices for the balance on the first lien and what CAN they do to her since she can only afford a small payment ($50 instead of $275)??
Thanks
Answer Sorry to say there are not many options with the car.
I would advise that she contact the first lien holder which I'm assuming is a finance company. Perhaps she could make them aware of her situation but that's not to say they will do anything different. She might qualify for a auto loan refinance to reduce her rate and that could lower her payment. If they can rewrite the term to reduce the loan payments that might also help.
