resposession?

iVillage Member
Registered: 07-16-2003
resposession?
4
Sat, 11-05-2005 - 7:42pm

my husband and i bought a car back in the spring....because we were down to one vehicle and decided we needed something reliable. well, it's reliable - but the insurance and payment quickly became too much for us. we didn't have great credit to begin with, and we don't make much money as we're both students who are currently out of school because we couldn't live and get to class on our aid and the money we could get from working around classes/homework time - so, of course, we could only get financed on a NEW car, or next to new car (either way, our payment was going to be over $300 a month) and, of course, with double the normal interest rate on either. so, right now, we'd have to pay almost a month's worth of our income just to get caught up on our payments. that's not going to happen. i'm just trying to figure out, once our car does get reposessed, what can/will we be held financially responsible for? i'm extra worried, too, because the car does need some minor body work, which we can't afford either (because we had to go with a high deductible to be able to pay our car insurance). i live in michigan - i know state laws are a bit different....but what should i expect? i plan on calling them to take it sometime next week. (i know that won't help the impact on our credit, but i really don't want it just sitting around here longer than necessary, and i'm afraid that they'll want it to have full coverage until they take it, even though it won't have a plate after monday anyway.) thanks.

*anna~rae*

iVillage Member
Registered: 03-27-2003
Sat, 11-05-2005 - 8:22pm

I really feel for your situation. I know how hard it is to be a poor student. I wish I had good news for you, but here's the facts (as I understand them):

If they repossess your car, it will do more than impact your credit. They will sell your car at auction (especially if it's damaged), probably for less than its market value, and then they will bill you for the difference between what they get for it and what you owe on it.

Ouch.

You do have options, though. First of all, have you tried calling them to get a reprieve on your monthly payments? Some lenders will let you skip up to two months's payments (which they then tack on to the end of the loan), as long as you call in advance. They might be willing to work with you even if you're behind already.

Meanwhile, put your car on the market. You will almost certainly be able to get more for it than they will after repossession, because they're not going to try very hard. If you can scrape the money together for repairs, do it--it will sell easier.

Now, the hard part is--you will not be able to transfer the title until you have paid the loan in full. So if you get less for the car than you owe on it, you will have to pay the difference yourself. Of course, this is still better than repossession, but it might be difficult to come up with the cash. Still, it's worth looking into because it will be much better not only for your credit rating but also for your pocketbook than having the car repossessed. Think creatively when considering sources for cash (and no, I'm not suggesting anything illegal! LOL): what can you sell? Can you have a yard sale? Can you take an additional weekend job temporarily? Do you qualify for additional student aid? Do your friends need babysitting? Can a professor use some pet sitting? Does your department need extra hands for typing, filing, or anything else of that nature? I've found that waiting tables usually pays pretty well and allows a flexible schedule. Remember that it's temporary until you get caught back up on your feet.

As for the damage to your car--it's possible you may actually be in trouble with the lender on that, though I'm not sure the ramifications. I know that they require you to carry insurance in order to protect what is essentially their property (the car) until you're able to pay it off. They may even require that you have any damage repaired since it is, technically, their vehicle. That would be in the fine print of your loan papers, or you could call them and ask.

I hate to be the bearer of bad tidings, but I figured it would be better for you to know all this now. My heart goes out to you--I know you must feel really overwhelmed and stressed right now.

Remember that as bad as it might get financially, you are not your debt. Even if it does come to repossession, it will not be the end of the world--you can dig yourself out. Others here have dug themselves out of similar holes. It just takes time and perseverance. Come here often for advice and comfort and encouragement and support. It won't always be like this.

Blessings,

Heather

iVillage Member
Registered: 07-16-2003
Sat, 11-05-2005 - 8:46pm

well, i'm working about 35 hrs a week in retail right now, i'm on call at a fast food place, and substitute teaching when i can. my husband is working 35 - 40 hrs a week at a fast food place and is trying to get a second job where he will work about 24 hrs a week. we no longer live in a collge town. and the car is worth about $7,000 less than it's current payoff. when i called the lender, i was told to pay X amount by X day or it would go to "consideration" - which means it'd probably be reposesed. the lender doesn't offer any way to reduce payments, or to temporarily skip payments. when we tell them we can't make the payment, they just keep calling us saying "pay this now". we don't realistically have time to prepare for a yard sale, or time or a place to have one. we'd probably be lucky if we made $100 off of one anyway. i'm starting to think that we might have to just declare bankrupcy and let this car go with it. i don't want to do that....but as it is right now, we can barely pay what we have to pay (rent, utilities, car insurance) and still have money left for groceries and gas to get to work. there really doesn't seem to be any way out.

*anna~rae*

iVillage Member
Registered: 03-27-2003
Sat, 11-05-2005 - 10:13pm

Hi Anna-rae,

Whatever you decide needs to be done, just remember that others have gone before you and a bad financial situation doesn't make you a bad person. It's just a thing.

I hope my post didn't contribute to feelings of hopelessness. It may feel bleak right now, but there is light at the end of the tunnel (even if you can't see it yet!). Even if you do end up declaring bankruptcy, it will all be over and off your record in a few years. And in the mean time, your financial situation can steadily improve. There is hope!

Most, if not all, of us here have made less-than-perfect money decisions in the past (and present), and most of us have been in the depths of despair at one time or another over our situations. I know I have. And the predatory practices of many lenders certainly doesn't make it any easier to pick ourselves up.

I'm sorry things are so tough for you right now. Let us hear how things go with the car.

Blessings,

Heather

iVillage Member
Registered: 07-16-2003
Sat, 11-05-2005 - 10:26pm

it's ok....it's just, i didn't realize how bad it was until i called a debt counselor and was told, after she broke down my monthly expenses, that i was like $200 in the negative before i made any debt payments. it doesn't seem like it should cost that much to live when you don't have kids, you're living in an old 1 bedroom apartment (that's actually cheap for the area - $390 + elec), you and your spouse work almost full time, and you don't even have cable. our biggest waste of money is DVDs (maybe one or two a month) and eating out, but we don't do that more than once a week, and it's very very very rarely more than $15 for the two of us.

next on my agenda is to get a lease signed someplace closer to where we work before the car goes. i know it won't be nearly as cheap, but we won't be spending as much on gas and i can get an extra half hour of sleep every morning. *hehe*

thanks.

*anna~rae*