Completely broke, missed two car payments. What can I do?
This comment was posted to reddit on Feb 24, 2017 at 3:26 pm and was deleted within 8 minutes.
Completely broke, missed two car payments. What can I do?
Who did you finance the car through, a bank, or a dealer or a manufacturer (like Ford Credit)? Did you have a cosigner?
STEP ZERO: IF YOU GET A LETTER SAYING YOU NEED TO APPEAR IN COURT, YOU NEED TO APPEAR IN COURT
Go find your car loan document. Find out who your lender is. Find out if you had a cosigner.
Review your loan document and see if there's a section on financial hardship (unlikely, but worth a shot).
If you have a cosigner, that cosigner is now responsible for making your loan payments. So, sucks to be them.
If you don't have a cosigner, your best financial bet is to find a second job and make the payments.
Assuming #4 is not a realistic option, you want to negotiate with your lender to let them take ownership of your car (called a voluntary surrender) for a reduced settlement. Basically, once you've missed enough payments they can sue you, repossess the car, and send your debt to collections, but all of that costs them money. If you just hand over the car and agree to repay something (which will be more than two months payments, probably closer to a year or more), you might be able to negotiate down the amount you owe. This is still going to screw up your credit just like if you had the car repossessed. The lender may even still sue you, especially since it doesn't seem like you're going to be able to make payments on the reduced debt.