Desperately need help for my father in law, any advice would be appreciated!

[jonblaze24]

Few years back, my father in law purchased a used 2014 Maxima from Carmax. Had low miles, car is a beaut.....but knew it was much more than he could afford but he was driving Uber a ton so whatever. Dont know the exact loan terms he agreed to, but I know his credit was absolutely shot so not only did he overpay for the car but the loan was probably awful.

Fast forward to last winter, his health started to rapidly decline and he wasnt able to work nearly as much as he used to. Without telling anyone, he panicked and "took some online offer" and refinanced his loan with SkyOne FCU...and while he lowered his payments about $70 a month, he kinda screwed himself with the terms and the interest and i think stretched out a new loan. 

Fast forward to a few months back, he unfortunately suffered a pretty crazy stroke and it's impaired him quite a bit. He is barely able to drive, if at all....so Ubering (or even working in general) is pretty much out of the question. His only source of income is disability/SSI....so needless to say, he flat out cannot afford this car. 

Here is the kicker, the car is somewhat dinged up. Front bumper is cracked, front quarter panel and left driver door are dented....so the value of the car is far lower than the loan balance. We just received his statement from Skyone and he still owes almost $19k on the loan, I think the best estimate from Carvana was like $9,500. Not even half of the monthly payment is going to the principal...7 payments in he hasn't even cracked $1,000 towards the principal balance. Just a pretty brutal situation that can't go on much longer.

We called SkyOne to explain and they are going to have someone reach out to him to discuss hardships, but I have no idea what they can even possibly do. Has anyone ever experienced this before? Does anyone have any suggestions on what we can possibly do to rid him of this vehicle? Any feedback would help!

[rileydude]

I  am very sorry about your father in law first and foremost. 

I am pretty sure he can not afford to continue paying for the car with SSI being thr sole income, good thing is that no creditor can garnish his SSI/SSDI for any commercial debt..so he will not lose a penny out of his SSA check. Secondly,  the creditor knows that too,  there is no money to grab from your father in law..I would assume that they will take the car and either offer him a interest free payment plan, or charge the remaining balance off.  How important is his credit to him at this point, he already had trouble getting the car a few years back..he could file for bankruptcy. Again, the creditor can not by law touch his money, the SSA check in his bank account is protected, as long his direct deposit is not mixed with other income. I personally would apologize to the Rep if he contacts you, but frank about the fact that there is no way he can make anymore payments and that he is on SSI...it's on them to bite the bullet

[jonblaze24]

Appreciate the feedback. From what the lender told us, they would repo the vehicle and take it to auction....whatever they get for it he would owe the difference and like you said in the form of a set repayment plan. The repo would be yet another massive hit on his credit and REALLY rid of any chance at a car in the future....but i can't think of anything he may ever need credit for again. My other concern is if he continues to recover and is able to drive again, him not having a car might be an issue with him going places, groceries, etc (hes not bed ridden or anything, just functions are a bit behind). 

I think the unknown in this situation that worries us is just how much will that monthly repayment be? I know theres no way for them to tell us but, given the trade in estimates I've been getting in comparison to what he owes, it could be up to 10k he may owe them after its all said and done (at that point i'd probably just advise him to pay the bare minimal every month until his time here on earth is up). Would just hate for him to give up the vehicle, still owe that massive chunk and then have a monthly repayment plan thats 2-300 for a car that he doesn't even have anymore...may as welll keep the thing at that point. 

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@rileydude wrote:

I  am very sorry about your father in law first and foremost. 

I am pretty sure he can not afford to continue paying for the car with SSI being thr sole income, good thing is that no creditor can garnish his SSI/SSDI for any commercial debt..so he will not lose a penny out of his SSA check. Secondly,  the creditor knows that too,  there is no money to grab from your father in law..I would assume that they will take the car and either offer him a interest free payment plan, or charge the remaining balance off.  How important is his credit to him at this point, he already had trouble getting the car a few years back..he could file for bankruptcy. Again, the creditor can not by law touch his money, the SSA check in his bank account is protected, as long his direct deposit is not mixed with other income. I personally would apologize to the Rep if he contacts you, but frank about the fact that there is no way he can make anymore payments and that he is on SSI...it's on them to bite the bullet

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@rileydude wrote:

I  am very sorry about your father in law first and foremost. 

I am pretty sure he can not afford to continue paying for the car with SSI being thr sole income, good thing is that no creditor can garnish his SSI/SSDI for any commercial debt..so he will not lose a penny out of his SSA check. Secondly,  the creditor knows that too,  there is no money to grab from your father in law..I would assume that they will take the car and either offer him a interest free payment plan, or charge the remaining balance off.  How important is his credit to him at this point, he already had trouble getting the car a few years back..he could file for bankruptcy. Again, the creditor can not by law touch his money, the SSA check in his bank account is protected, as long his direct deposit is not mixed with other income. I personally would apologize to the Rep if he contacts you, but frank about the fact that there is no way he can make anymore payments and that he is on SSI...it's on them to bite the bullet

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[rileydude]

You going to have to talk to the lender about the payment plan, they obviously will try to recover as much as they can. I am all for paying back what you owe and what you borrowed. However, life changing events happen, and if it's not there, it's not there...the lender mist likely know that they can not legally recover their loss if your father in law flat out refuses to pay anything. So in that sense I would imagine that they will work with you, like a interest free payment plan. I do understand the concern and what the future may holds, but his financial situation right now changed dramatically..I know SSI is just the very bare minimum to survive. Once he recovers to a point that would allow him to return to work, make sure he let's SSA know and request a ticket to work,  that way he will not lose his benefits..it's a trial work period. All things considered, they gonna repo, auction off the car and going to try to get the remaining balance from him...just don't feel pressured by it, you actually have some leverage to negotiate with them. As far as I concern, I would make sure that your father in law has enough money to live on now..if that payment is too much..tell them to kick rocks and buy a car cash for a couple grand once he gets better.