Author Topic: How to deal with an unpaid car loan?  (Read 517 times)

topshot

  • Stubble
  • **
  • Posts: 153
How to deal with an unpaid car loan?
« on: October 29, 2020, 08:14:58 AM »
I met with a gentleman from church yesterday with a rather unique situation that I wasn't sure how to deal with. Two years ago he impulse bought a new car in IL @ 19% interest (poor credit) so he'd have reliable transportation for his kids. Within days he tried to take it back, but the dealer wouldn't budge. Anyway, within weeks he lost his job and has not made a single payment! There was a downpayment initially, but that only affects initial principle for the loan. He doesn't have insurance either. He's been essentially homeless the past couple years. He recently got another job but only brings in about $800/month, and custody arrangements and school are keeping him from taking more hours or a different job.

Ideally, he needs to get rid of this $25,000 vehicle and into something much cheaper but still reliable, but I'm not sure what he needs to do to get out of this. He's told the lender in the past to just take it, but nothing has happened. He said he's not even received any collection notifications. I wonder if the "bad credit" insurance policy that was part of the deal somehow paid this off??? I'd never seen such a thing (is it like PMI?), but I didn't read through the policy either.

Should he just stay with status quo until car is eventually repo'd, which may not happen for some time apparently? File bankruptcy?

mistymoney

  • Pencil Stache
  • ****
  • Posts: 823
Re: How to deal with an unpaid car loan?
« Reply #1 on: October 29, 2020, 09:51:18 AM »
Unless he reaffirms the loan and pays on it, the car will be repoed bankruptcy or not.

is he at least living in the car - not streets?

plog

  • Stubble
  • **
  • Posts: 244
Re: How to deal with an unpaid car loan?
« Reply #2 on: October 29, 2020, 01:13:54 PM »
His hair is on fire and this car is but a deep scratch on his arm.  He's got a bunch of things that need to be addressed way before the car.

So, status quo the car until it becomes an immediate issue while focusing on the real problems.  Bankruptcy doesn't change his life one bit at this point.

topshot

  • Stubble
  • **
  • Posts: 153
Re: How to deal with an unpaid car loan?
« Reply #3 on: October 29, 2020, 03:27:52 PM »
is he at least living in the car - not streets?

He's been staying at a friend's vacant house and giving him utility money.

Paul der Krake

  • Walrus Stache
  • *******
  • Posts: 5512
  • Age: 13
  • Location: UTC-10:00
Re: How to deal with an unpaid car loan?
« Reply #4 on: October 29, 2020, 03:38:57 PM »
It's unlikely the car will be repo'd this late. Usually the attempts are done within the first couple of months, then the lender writes off the loan in a spreadsheet somewhere, never to be looked at again.

For whatever reason it sounds like your acquaintance slipped through the cracks.