should you ever file bk to get out of a car loan?

[annm]

I feel like I'm at my wits end. I have tried to rebuild my credit with marginal success. I think it hovers around 617, which is progress from some 490 when I started.

But it isn't good enough. Not good enough for a refinance. Not good enough for credit cards with a CL higher than $500. I'm sick of all of this.

My major issue is a car loan that I'm trapped in for another 4 years. I took it out, because I was naive and really stupid and also believed that I would somehow be able to refinance it in 2 years and all would be right with the world.   2 and a half years later and I realize I've paid almost 15k for an 18k car that I still owe 14k on is making me too sick for words. But I typed a bunch anyway. 

I don't need the car anymore. I moved to a major city with major transportation. While it's a great luxury it's expensive and I can do without it. If I could get out of this car I would save around $700 a month - car note, the full coverage car insurance required on the car, gas, downtown parking garage for my job.  I might actually be able to afford a life?

I have 4 collections that I can't get rid of. One is scheduled to fall off this year but whatever, I can't imagine it will do much of anything to my scores.

I don't want to refinance this car anymore I just want to drive it into the RIVER. I don't want this outrageous payment for another 2 years if I somehow managed to refinance and definitely not for another 4 years if I can't.

My credit has been screwed up for most of my life, what's a BK? I'm not planning on buying a house anytime soon.

The only thing I'd be concerned about is a Care Credit account that my dad co-signed for me. I had a $7000 medical bill that I have paid down faithfully to about $3100. I don't want him to get hurt in any way, in fact, I think paying this may have helped his credit score. 

I do not want to live off of scraps for the next 4 years so that I can own a car that I have more than paid for already.

[DaveInAZ]

Well, to answer your question - No, I don't think it's worth filing BK just for one car loan. One, it will cost you around $1500 for attorney & court fees, and will be on your credit reports for 10 years, hurting your score. Two, that Credit Care laon your dad co-signed for complicates things - your obligation to the debt would be discharged in BK, and then they would come after your dad for the balance + any late fees & collection fees. 

Have you checked Kbb.com (kelly Blue Book) to see what it's worth in a person to person (private) sale? The ideal solution would be that you could sell it for maybe a couple thousand less than you owe on it and use the sale proceeds + other funds to pay the car loan off. If you don't have the couple thousand over the sale amount you could try a personal loan from Prosper or Lending Club.

The worst solution is for you to let the car loan co. respossess the car - they always sell them off at an auction, pretty much the lowest possible selling price, and then come after you for the remaianing balance on the loan + alot of fees (repo fee, court & attorney fees for getting a personal judgement against you).

[annm]

The KBB value is about 7500. I owe 14700. 

Assuming I could find someone to buy it, I would then have to convince the satanic Regional Acceptance to agree to release the title without payment in full. Ha...ha...ha.

I am consistly rejected for private personal loans. 

What if I paid off the Care Credit and then did the BK?

The thought of a BK being on my CR for 10 years means nothing to me. I've had screwed up credit my whole entire life. At this point it BK sounds like a scary thing that isn't actually all that scary. 

[DaveInAZ]

Since you said you paid $18k for it 2 1/2 yearts ago I didn't think it would have lost that much value. I would suggest you try working with a reputable credit counseling service. They could give you worthwhile advice on how to stop always having bad credit, but they probably couldn't get any concessions from Regional Acceptance - I Goggled them and they do seem to be pretty ruthless. One guy said he got behind one payment because he's was spending so much on his wedding, and they sent a bill collector to his house on his wedding day demanding payment or keys to the car.

If you paid off Credit Care you would have to wait to file BK, otherwise Regional Acceptance could claim you gave Credit Care preferential treatment, demand the payments be returned so the trustee can divide the $$$ between them. When you get close to paying off Credit Care you should talk to an attorney and get legal advice on how long you should wait to file after paying them off. 

[annm]

How could Regional Acceptance claim I'm giving Care Credit preferential treatment if I'm still paying Regional Acceptance? I'm not behind on any payments with anyone I just don't want to deal with this car anymore. I could feasibly rock back and forth in my room for a few months and toss every extra cent at Care Credit. 

How would they even know I'm the one who paid Care Credit if I have a co-signer? Maybe my dad did. 

Hmph.

[DaveInAZ]

Well, since you said you have a balance of $3100 on Credit Care (CC) and you want to get rid of Regional Acceptance (RA) ASAP I assumed you would be making some large payments to pay off CC. If you made just the regular, scheduled payments to both then RA couldn't claim preferential treatment, but that would years before you pay CC off.

And the BK court would know who paid them off, they'll request at least a year's worth of bank & CC statements to make sure you're not committing fraud in any way. Folks have paid off loans to relatives before filing BK and trustees catch that and demanded the $$$ back, preferential treatment.

[ezdriver]

Your payoff number is your balance of principal...not payment X number of payments left in the contract. I refinanced a car and the old auto finance company demanded payment of every dime it would have earned if I had made all payments for the life of the original finance agreement. My attorney told them to go pound sand. They released the lien.

Consult an attorney.