Hello,
I'll start with some general info. Ive had some uphills and downhills with my credit in the past. Ive been down to the 350's and today sit around 650 and working hard to get to 700, but I think there's something that needs taking care of to do so AND for peace of mind.
In 2016 I bought a used car (CAR 1) and captial one financed, with whom I already had checking and a low limit CC. Of course I f**ked it up, and stopped paying it. I expected them to come and repo it, but they never did. There was still at least 20grand left to pay. I had put down 10 grand mostly from insurance on my last car (accident
I got some emails to settle from them for $4,500. I havent responded.
SO NOW it's 2024, the car in quesion has 310,000 miles but it runs. A dealer said it was worth $500. I decided to see if I could get another car.(CAR 2) My work depends on me getting places. So I get a $40,000 car, put down $4000 - and through the dealer it's being financed BY CAPITAL ONE. I ask the dealer did they mention the other car? He said no, He also said no one else would finance me because of the other car - but my score and finances were good.He admitted being as confused as I was
The origional car now sits in my driveway waiting to be repo'd. It still hasn't happened. I would like to figure out whats best for me to do and hopefully improve me credit score in the process - even if I have to take an an initial hit.
Should I:
Figure out a way to pay the $4500 settlement even though the new car eats alot of my possible savings towards the money? Then I'll take a tax hit I would Imagine.
Tell them it's waiting for them to pick up, get a repo on my credit report and take a HUGE tax hit.
Something else?
Time Since Most Recent Late Payment - 5 years 9 months - so Ive been paying everything except CAR 1
HELP!
What does your old car loan look like on your credit reports ? A couple of months ago it was listed as "bad debt/charge off/Unpaid balance reported as a loss". The past 2 months it's not mentioned. The new one is.
It shows as closed and charged off from 5 years ago ? The past 2 months it does.
Also what interest rate / terms did you end up with on your new car ? 14.53%. I'm hoping to refinance once rates come down and this problem with car 1 is resolved.
I'm assuming you don't have the title to your old car so you can't really do anything with it, correct ? They're not going to come and repo the car at this point even if you called, as it would cost them much more than the value of the car to deal with it. No title. How can I deal with it besides paying what they ask? Is that the only option?
Are you negotiating with Cap1 or a collection agency to settle on your old car ? I'm not negotiating in fear of starting the process all over again on my credit report. It is nearing 7 years if all else fails. They have sent emails they'll accept $4500. I also have a fear of having to pay capital gains tax once its settled. it"ll be a big hit.
Thanks for your input!
What do you mean Capital Gains tax? You only pay that if you acquired an asset for less than you dispose of one for, and that's very unusual, almost unheard of with a car. It happens to rare collectables, and for a while it was happening during COVID. Cars depreciate like crazy, and you probably bought this thing from a dealership.
Do you mean a 1099-C?
"If we forgive $600 or more of the principal on a debt you owe, we’ll be required to send you a 1099‑C form" - Yes a 1099-C
