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Old 03-20-2010, 03:28 PM
 
Location: Dover
243 posts, read 809,577 times
Reputation: 90

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Hello everyone. Thanks in advance for any and all advice/suggestions you can provide me.

I am completely in a bind here. Last year I was employed at this company for about three years, making pretty decent money. Got laid off and ended up finding a job a month later. Then lost that job due to it only being a summer hire position...

I have a (new) 2007 Ford Escape with about 55,000 miles on it. My car payments alone are $492.89 per month. I also have a co-signer which is my grandmother (who is about 80 years old). Since losing my job, I could no longer afford my insurance so that was canceled back in November. At the time, I had contacted the bank to make a loan modification for a few months until I knew what was going on with my job situation. They did the "balloon" thing and lowered it to $280 per month until January 2010...

Still no job, unfortunately. Currently 29 weeks pregnant and getting married next week Friday. I am 21 years old (if that makes any difference)...

Sometime in February, I knew I wasn't going to be able to afford paying the entire car payment so I called the bank to ask for an extension on the modification. I filled out the budget worksheet and two weeks later found out that they could not help me because I have no income. So they said that the responsibility falls on my grandmother since she is liable. At the moment she has a few rental properties that are in foreclosure because she doesn't have the money to pay the mortgage. So we are both stuck in this bind together and I really hate putting my grandmother in this position...

The bank told me to fill out another budget worksheet that includes my husband's income information as they would be able to figure something out. They also advised for my grandmother to fill out on as well. (I have everything but cannot fax it until Monday). So in the meantime, today, the bank had called my grandmother and told her that they added about $5,000 to the loan amount due to the car not having insurance. They also advised that my payments each month will go up to $800-something.

At this point, I'm not sure what to do. I obviously can no longer afford this car and the very high payments. My husband has a car as well that we financed so it's not like we don't have another car. My unemployment checks are supposed to come in next week but who knows how that will go because they are always so slow. I feel like voluntarily giving up my car and just having them repo it but I'm not sure IF that is the best case. We can afford to live off of one car for now. But later in the future when we want to get another car, how will a repo look? Will this do anything to my husband's credit info?

Ugh... Can someone please give me any advice?!
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Old 03-20-2010, 07:59 PM
 
28,455 posts, read 84,936,054 times
Reputation: 18723
$800 a month for Ford Escape. That is not a bank, that is joke. Drop the car off whenever you can.

You are not dealing with a situation that you need to, and you obviously did poor job of shopping for a loan in the first place. If your credit was so poor that you could not get a good rate you should not have gotten car you needed to finance.

What sort of downpayment did you make on this thing? In your situation it does not even sound like you need a car.

Take it back and work on repairing your credit.
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Old 03-20-2010, 08:44 PM
 
Location: 23.7 million to 162 million miles North of Venus
22,823 posts, read 12,012,912 times
Reputation: 10144
If your soon to be husband is not on the loan then they cannot hold him responsible.

If they sue for the deficiency, and they probably will, both you and your grandmother will probably be named on the suit. If your grandmother did not sign the "back" of the contract, in the space saying she will be liable if you default, then she may have a good defense in court. If she did sign that spot then she could be held liable along with you if/when they sue and get a judgment.

If you let the vehicle go for repo then the vehicle will be sold at auction, probably for 1/4 to 1/2 of what the vehicle is worth. You will be liable for the deficiency amount plus the fees and costs of the repo. Unfortunately after a repo some people find that they still owe as much as what they originally owed on the vehicle loan, plus their credit reports are trashed.

You need to search and read your states repo laws. If you lived in another state when you took the loan out you need to also read that states repo laws. When a repo is done the lender must follow the repo laws to a T.
If they fail to follow the repo laws then you may have a defense when they sue, as long as you keep everything and can prove their failure. (I wouldn't let them know you know about that or they may go out of their way to make sure everything is done perfectly)

The repo deficiency falls under the UCC with a 4 year SOL (statute of limitations) unless you live in OK where it is 5 years (boo OK). But, if they sue past the 4 year mark, from the date of the repo sale, then it would be up to you to claim an affirmative defense of SOL using the UCC statutes to back your defense.

IMO, if at all possible you should try to find a third party to purchase the vehicle from you. If you sell it for less than what you owe then you will have to have the funds to make up the difference to the lender. You would also need to speak to the lender about allowing you to sell it yourself instead of letting it go for repo.
Selling it to someone else, even if you have to make up the difference, would be much cheaper than having to pay the deficiency+costs. Plus, you won't have a "repo" (and maybe eventually a judgment) reporting on your credit reports.
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Old 03-20-2010, 08:59 PM
 
2,036 posts, read 4,229,140 times
Reputation: 3201
You should let the bank have the car and get a personal loan for the difference. You will pay the difference so your grandmother isn't on the hook for the amount. If you can't get a personal loan, try and work something out with the bank regarding payments and get it in writing. If you have to tell the bank I can afford $150 a month take it or leave it, then that's what you have to do. Most likely, they will sell the debt to a third party. Then you and your Grandmother will have the joy of dealing with them trying to bully and scare you into sending more than you can afford. Try not to let that happen.

I'm sorry you had to learn such a painful lesson. This should serve as a cautionary tale for anyone considering co-signing any type of loan.
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Old 03-20-2010, 09:00 PM
 
28,455 posts, read 84,936,054 times
Reputation: 18723
Yes, in the broadest sense I completely agree with berdee that IF the lender will allow you to sell this car on your own that is far wiser than just letting them repossess it.

If you follow berdee's advice that is almost certainly the quickest way to put this bad mistake behind you.

Good Luck!
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Old 03-20-2010, 09:37 PM
 
Location: Dover
243 posts, read 809,577 times
Reputation: 90
OK, so here is the thing...

I bought this car brand new when I was 18 years old. Yes, I obviously made a bad decision in getting this car BUT at that time, I could afford to have this car. We ended up putting $2,200 down and the APR thing is 7.49%. I've tried to get a loan modification extension but again since I have no income at this time, they will not help me. I looked up the value for the car and it's less than $8,000 so there is no way I can get someone else to buy it from me. Also, it's not that I have poor credit, I have no credit or not enough credit which is why my grandmother co-signed. I've tried to get it re-financed but because I don't have $1,000 to put down they cannot help me. When I got the first loan modification I told them I could only afford $280 which is the same case now when I tried to get the extension. I have also tried going through another bank to get it re-financed and again because I don't have enough credit NO ONE CAN HELP ME!!!

Thanks for your responses. I understand what you're advising but at this point there is no way I can get a loan for the remainder amount or put down any money for anything. I am already two payments behind, trying to work something out with the bank, and I feel like the only option at this point is to voluntarily give up the car back to the bank. I mean, even IF I had enough money to cover the past payments plus a month or two in advance, I cannot afford an $800-something payment due to no insurance...

Ugh!! Lesson learned for sure.
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Old 03-20-2010, 09:58 PM
 
28,455 posts, read 84,936,054 times
Reputation: 18723
Yeah, I sure am not going to beat up some one that made a mistake when they were 18. As long as you learn from this it is not the kind of thing that'll make it impossible to get back on the path of good credit.

I do think that it would be wise to TRY to talk to the lender and get them to agree to allow you to sell this as a private party. You of course would STILL OWE the lender quite bit of money, but as was pointed out the cash you get would allow you to at least have some dollars to give the bank. If you handle that properly, and get the proper assurances that they will agree to allow you to make reasonable payments that sure beats having them file suit to try to get whole debt all at once.

This is big deal -- the whole reason that the lender would do this is to save themselves money. Repo companies and debt collection firms and layers ALL take money out of the lender's pocket. What you need to do is convince the lender that you know you made a mistake. You want to pay them back and realize the car needs to be sold to do this. The regular phone answers will not be agree to this. You will need at least a layer up in the organization, maybe more.

If you get the lender to agree to allow you to sell the car, but continue to pay back the difference over time that really is better all around.

Last edited by chet everett; 03-20-2010 at 10:06 PM..
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Old 03-20-2010, 10:16 PM
 
Location: Dover
243 posts, read 809,577 times
Reputation: 90
LOL yes please don't beat up on me too much. I know I made a big mistake like a year after I got the car. When I did the first loan modification, the bank told me that IF I had the $1,000 down the re-financed price would be half of what the normal payments were. So I'm thinking I will ask the bank a few questions as to what my options are BEFORE a repo needs to take place. Honestly, I don't think I will have any "extra" money any time soon. So do you think they will allow me to pay back whatever the difference is (IF I did sell the car to someone else)?

Can you give me some more verbiage? LOL Does it help if I cry a little?

Thanks.
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Old 03-20-2010, 10:36 PM
 
28,455 posts, read 84,936,054 times
Reputation: 18723
Crying is might help, and the fact is you have no job, probably get one anytime soon as you are expecting a baby and have a lot of legitimate reasons to be upset with this lender.

I mean seriously, when they said "a down payment would cut your payment" you really have given them a lot more dough than many people with a 3 year old 55,000 mile car would have.

The conversation that will probably get you the furthest is basically the most honest: "I am broke. Like really and truly broke. My job is gone, my unemployment is not coming. I'm living with my 80 year old granny. I have a baby on the way. I know you can't change that, but I am also begging you to let me sell this car on my own. I think I can get a lot more money selling as just a nice used car than you can get selling as it as repo. I know you will need to agree to allowing me to transfer the title. I am willing to sign a promissory note for whatever fair amount makes sense. I will pay you the money over time. I want to make things right and I don't want my grandma to be scared that some one is going to sneak her house looking for this car and I don't want my baby to have a debt ditching mom. Let me know what I have to sign and where I can send the documentation.

Keep asking to get sent higher up the organization. You have to make the phone answer understand that you want to make things right and you realize that the people that are in charge will need to be contacted.

Good Luck!
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Old 03-20-2010, 10:44 PM
 
Location: Dover
243 posts, read 809,577 times
Reputation: 90
Wow, great verbiage. LOL I'll have to change some wording a little bit but OK I get the idea.

Thanks for your help and advice. Take care.
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