Credit Card Center Advertiser Disclosure†
05-18-2017 11:01 AM
05-19-2017 10:47 AM
Welcome to Myfico, this is an excellent place to learn about credit and improve yours in the process. This situation has been discussed here in the past, several times actually. Some have chosen to do voluntary repos (not really voluntary but nonetheless), some have simply kept the cars and used them and decided to wait until something happens with the logic that they have a free car to use so every month they have use without costs is better. Some have called the lender and worked out payment arrangements and finally some have filed chapter 13 to reorganize their debts which results in these car loans being reduced to fair market value or even less and included in the chapter 13 payment plan. I don't think there is a right or wrong answer, the chargeoff is a burden to your credit report and its a liability because if they do repo the car you need to know they will sell it at auction and you will be liable for the difference between what they get plus fees and the balance owed plus interest so the liability isn't disolved simply because you return the car. They can and frequently do file law suits and get judgements against folks for debts like these and their ability to collect varies by state, some will allow them to go after your paycheck, some do not but it isn't a pleasent position to be in. I have learned (the hard way) to not let these things feaster and to address them proactively. I would do one of two things, do a free consultation with a bankruptcy lawyer to determine if that is a benefit to you and in the process learn about what the best options on this car are in your state (without being obligated to do anything) or call wells fargo dealer services and see if you can negotiate a reduced amount to resolve this issue and get the title on the vehicle. They may have turned this over to a collection agency already, have you checked your credit reports or received any correspondence on this?
In all of the cases I have seen like this it has been on older cars like this one, yours was 7 years old at the time you stopped paying so they may have decided its not worth the effort to repossess it. The debt won't be gone unless you tackle this definitively, the car is not worth anything of significance at this point so its probably best to negotiate the debt down to something you can live with (you have had a free car for several years so even if it costs you a couple of grand you win) and get this resolved on your credit report. Often times you can negotiate the debt for pennies on the dollar.
05-19-2017 11:34 AM
05-19-2017 03:57 PM
Thanks for or your response. So if the car has gone to collections it is not on my credit report. I only owe $2300. Which is about what the car is worth according to KBB. Do you think they would negotiate it for less? Since it's hard for me to even come up with this amount, even getting the title from them and selling it I would break even. My thoughts are to call them and ask them to just come get the car? But if they sell it for less then I owe them... ugh
If it books at 2300 they would sell it for less than half (they sell at auction) plus they would add a bunch of fees that will add up quickly. The car is worth 2,300 and you owe 2,300, I would do all I could to get the collections agency to accept payment if they would give you the title and do a pay for delete. They may not do the second part but it never hurts to try. If they deleted this it would help your credit. The low amount you owe is why they haven't bothered to repo it, costs to repo are at least 5-600 bucks. If you could pay it off and get the title and sell it you win really, you will have limited your liability and broken even while improving your credit because open collections and chargeoffs are hurting your scores. When I resolved mine I believe I got a 40-50 point bump. The collection agency paid pennies on the dollar so offer then half what you owe if they give you the title and do a pay for delete, get it all in writng first.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.