Since they don't offer refinancing when you go to upgrade/trade out of that vehicle (I would recommend going to your local Credit Union first) they will automatically try to get you a lower rate with your new vehicle but I would say get rid of your collections if not all at least get you to the middle 650 mark on your vehicle FICO and get that squared away while you finish the rest starting from 0 will not help like you might think.
@Girlzilla88 wrote:CLAPS YES!!! This is exactly what I figured and "Giving it back/breaking even" is still considered a Repo I work at a dealership so yes and there is nothing wrong with living with family to get back on your feet I actually applaud you for it a lot of people don't do that so yes get your info in order like you were planning and then refinance they recommend at the 1 to 2 year mark or having your vehicle not sure how recent you got it?! But that part work out later and in doing so you will get a lot lower apr and it will reflect on your credit as a paid off loan when you refinance or upgrade so it will help you there as well
CLAPS NO!!!
OP has listed $6500 (and growing) in unsecured debt and is making TWO car payments. There are also alternatives, in today's market, to voluntary possession. You seem to be stuck on that and that is not the OP's only option. Not to mention that unless ALL of his collections agreed to a PFD (unlikely), he will not be in a position to re-finance for a VERY long time. Any re-finance will still be an aweful rate. Even worse if one of the creditors does not agree and simply sues.
OP, it's your life and you are an adult. But if you follow Girlzilla88's advice, you will not get out of debt. It's 6th grade math. And to put it frankly, you are repeating the same mistake with this auto loan that you did with your first auto loan. How do I know? I have been there, EXACTLY where you are, with a 550 score, more than a decade ago.
I applaud you and there is nothing wrong with:
Getting rid of the car and knocking out whatever remains ASAP
Getting rid of your $207/month phone bill
Getting rid of your $147/month cable bill
And than stockpiling cash and be in the strongest position to negotiate with the collectors that result in a PFD.
Your car loan is a boat anchor and you are slowly sinking. It's that simple.
I started out a 537 score and took it to a 750 middle score in a year's mark! I also work for an automotive dealership. You are right they can make their own decision but getting rid of that vehicle will be another repo they do not need. If they organize their information and do their payments effeciently it won't be that long at all. If they did go by a plan I say 1 to 2 years max for them to be right side up and honestly if they really stuck to it it's doable in a year.
@Girlzilla88 wrote:I started out a 537 score and took it to a 750 middle score in a year's mark! I also work for an automotive dealership. You are right they can make their own decision but getting rid of that vehicle will be another repo they do not need. If they organize their information and do their payments effeciently it won't be that long at all. If they did go by a plan I say 1 to 2 years max for them to be right side up and honestly if they really stuck to it it's doable in a year.
With a 2nd job or increased income, yes. Without it, no. Unless there are only about 6 payments left in his current auto loan.
You are treating the symptom and not the problem.
Agree to Disagree they said they had extra money to buy nice things here and there so they are not Strapped if they buckled down took it one thing at a time then got the vehicle score up enough to then trade out with a lower apr they can then knock out the rest while continuing to grow and work on their credit. But that is just one way and if they want to talk to me or someone else in regards to the vehicle they can but the collections are hurting more than that apr is score wise money wise yes the apr is costing more in the long run but if they want to trade out refinance they will get a better rate once they knock off some of the collections and raise that score
@Girlzilla88 wrote:Agree to Disagree they said they had extra money to buy nice things here and there so they are not Strapped if they buckled down took it one thing at a time then got the vehicle score up enough to then trade out with a lower apr they can then knock out the rest while continuing to grow and work on their credit. But that is just one way and if they want to talk to me or someone else in regards to the vehicle they can but the collections are hurting more than that apr is score wise money wise yes the apr is costing more in the long run but if they want to trade out refinance they will get a better rate once they knock off some of the collections and raise that score
I am going to have to agree with OmarR and you are giving out bad advice.
The only reason OP thinks they have extra money is because they have ignored and are ignoring their debt. Heck, it's in collections!!! They absolutely do not have extra money. OP is in collections AND living at home.
OP, not trying to come down on you or sound like an a-hole because I have also been there. Keeping your current car is a mistake, period. Trying to hold on to a mistake for any longer is a mistake. You will never get out of debt unless you make changes in your choices and lifestyle, and it begins with this car.
And I sadly disagree with you as well no offense but returning the vehicle won't fix their collections issue and will also hurt their cosigners credit as well. But if they really wanted to and they had/have extra money they just aren't spending wisely currently that doesn't mean they can't be like....look I need to get this together.....I have been in that spot before too years ago and I said I would get my ducks in a row and I did and it took me a year to do it. If they have the right tools and support they can without having to get rid of the vehicle.
@Anonymous wrote:
@Girlzilla88 wrote:Agree to Disagree they said they had extra money to buy nice things here and there so they are not Strapped if they buckled down took it one thing at a time then got the vehicle score up enough to then trade out with a lower apr they can then knock out the rest while continuing to grow and work on their credit. But that is just one way and if they want to talk to me or someone else in regards to the vehicle they can but the collections are hurting more than that apr is score wise money wise yes the apr is costing more in the long run but if they want to trade out refinance they will get a better rate once they knock off some of the collections and raise that score
I am going to have to agree with OmarR and you are giving out bad advice.
The only reason OP thinks they have extra money is because they have ignored and are ignoring their debt. Heck, it's in collections!!! They absolutely do not have extra money. OP is in collections AND living at home.
OP, not trying to come down on you or sound like an a-hole because I have also been there. Keeping your current car is a mistake, period. Trying to hold on to a mistake for any longer is a mistake. You will never get out of debt unless you make changes in your choices and lifestyle, and it begins with this car.
I say extra money leftover because I can pay my AMEX balance off with $600-700 that's disposable. I've lived with an ex-spouse before but it's ex-spouse for a reason. Do I HAVE to live at home? No, but I choose toand she prefers that I do. I do not trust the Veteran Affair sending in a caretaker to mentally abuse or phyiscally abuse her like they did at the V.A in Boston a few years prior.
What I'm saying is, I do not KNOW if I should
A: Ignore the debt until 7 years.
or
B: Do PFD
Omar, has stated that is unlikely
or
C:
Pay it off as settled for less/in full.
My car loan is just that and I can't repo it again. I will try to trade it in the future when my credit is better. My score is killing me, not my loan's rate. I want to take one step at a time.
I have successfully done several PFD it is up to you if you can pay it in full they are more likely to accept the offer which is why I say one at a time but if you do that route just get it in writing/email. You can ignore it for 7 years but that is a LONG time and if you do that will hurt your chances of trading out/refinancing your vehicle as it won't improve your score with them still lingering on there.