in over my head

[Anonymous]

I have a 2002 trailblazer that I bought used in 2004. My interest rate was HIGH. 17.50%. The total loan was for around $25,000. 3 years later with 3 years remaining on the loan I still owe $20,000. My note is $600, gas $400-$600 a month, car insurance $254 every two months. I can't afford it. When I got the truck I had a roommate, and I didn't have to pay for childcare. Now I don't have a roommate, have to pay for child care for two children and I had to move in with my mother because I could no longer afford it. I was going to do a volentary surrender of my truck, so I got another car first. I know the repo is going to mess up my credit, but I need to beable to take care of myself and my children on my own. Without depending on someone else. My friend is now saying he'll make the payments on the truck. It's only worth about $7,000 or $8,000. If he's willing to make the payments should I just let him so I don't mess up my credit more than what it already is. His credit is worse than mine so he can't get a loan. If he doen't make the payments I can still do the volentary surrender, if he does make the payments I can keep the repo off my credit. What should I do?

If I do the volentary surrender how do I go about rebuilding my credit?

If I do the volentary surrender I do intend to still make payments on the remaining balance, just at what I can afford.

[George2037]

My sister is going through something similar to this right now, and I can relate to it.  If your friend is willing to make payments, and make sure they keep it insured it would most definatly be better than turning it in.  I would highly recommend coming up with an agreement and have it signed.  It may not carry much weight in court but making it official may entice them to make the payments.

I did a vouluntary surrender, and it basicly turns into a repo that you are making payments on.  I would get the new car before anything hit's your credit, have your friend give you the payments so you can keep track that they are actually being made.  In the agreement I would stipulate that if any more than 2 payments are submitted 30 days or more late the truck must be returned to you, and the agreement becomes void.

Since it's all in your name I would be very carfull, but anything is better than returning it and paying for something you don't have.

[Anonymous]

I let my friend take over payments on a car that I just didn't need anymore.  I had her sign a note spelling out the payments terms, late fees, insurance, etc. and things have been fine.

It's helping my credit because she is making the payments timely.

But beware - money issues can make you enemies real quick.  Just be careful!

[cgmiller63]

One other thing to consider is that your name will still be on the title. If your friend gets into an accident or something, the injured party can go after you.  Also,  insurance may become an issue.  I'm not sure how your friend can insure a vehicle where another party is the registered owner.  I knew of a case like this. My friend was in the military and got deployed to Iraq.  He let his mother (who has bad credit) take over the car.  She was constantly late with the payments,  she let the insurance lapse, and got into an accident with an insured driver.  My friend ended up having to take a big hit on his credit because the car was totaled and there was no insurance to cover the loan.  It was a HUGE mess.

Message Edited by cgmiller63 on 08-30-2007 10:16 AM

[Anonymous]

Hi- I didn't have quite the same situation-but please remember that no matter what if you voluntary surrender- you will still have a repo listed.

[Anonymous]

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sassy1980 wrote:

I have a 2002 trailblazer that I bought used in 2004.

...

My friend is now saying he'll make the payments on the truck. It's only worth about $7,000 or $8,000. If he's willing to make the payments should I just let him so I don't mess up my credit more than what it already is.

If you go this route, I would ask how good of a friend is he and can you afford to loose him as a friend? I ask because money has a way of breaking up marriages, relationships, familys and friendships.

If you let him take over the loan, call up the company and ask about their grace period reporting lates. 5 days? 15 days? 30 days? It's good to know this so you know how much "cushion" you have. If he misses a payment, and the OC calls you when it's 10 days late, but they don't report it late to the CRAs until it's 30 days late, then you could make up the payment if he couldn't.

You might ask him to pay you directly and you pay it. That way you know it's paid. You could make up a story about the OC insisting payment be in your name, with your check, since the loan is still in your name. Makes the OC the badguy and not you.

Write up an "agreement", both of you sign it, and go get it notarized.

• He agrees to pay the monthly payment to you each month.
• He agrees to maintain full insurance coverage for the duration of the loan.
• You agree to pay the payment to the OC ontime each month.
• You agree when the loan is paid that the vehicle is his and you'll sign the title over to him.
• He agrees to pay any taxes and other fees associated with the title transfer and the "sale" when the title is switched to his name.

If he balks at any of this, "because we're buds", tell him it protects him more than it protects you. If you decided to be a jerk, once the vehicle is PIF, you could claim it's yours and the title would be in your name.