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Registered: ‎05-18-2017
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Charge off, still have car

Any advice would be much appreciated...

So I bought a 2006 Passat in 2010. Took out a loan with Wells Fargo. Stopped making payment due to financial hardships in 2013. I'm assuming the car was supposed to be reposed but I currently still have it. On my credit report it is a charge off. They still have title... and I owe more than the car is worth. I also don't have the money to pay it off. I'm over the headache. What do I do? Should I try to have them voluntary repo it? What would that do to my credit? Should I find someone who will lien it and see if that'll do anything? I really just want the car and debt gone. Thanks for your help!
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Posts: 1,602
Registered: ‎12-16-2014
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Re: Charge off, still have car

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.

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698
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Re: Charge off, still have car

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
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Re: Charge off, still have car


Cibent88 wrote:
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.

 

Gardening till 2018, Goal of 700's by the end of 2017
MyFico Scores Aug 2017: EQ 675 TU 695 EXP 698

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