[jmjj215]

You could find a dealer that will take your trade-in and give you a much cheaper used car. That's quite easy to do. You would just take it to a used lot. Also, you ruled out that someone would buy 20k used car - but I forgot that my dad just did - so there are those out there. Check ebay and you'll see used cars going for 20k. So, best bet still would be sell it private party and get that 3k used car. And yes- you can find a reliable 3k used car that would definitely not cost you the difference in monthly savings on repairs. My car cost a smidge over 3k and it's been going great for 2+ years - 0 problems.

The problem with the refi solution is that it only solves the cash flow problem by stretching out the time they're in debt, and moving the debt around. With my solution, they get out of 10k worth of debt and improve their cash flow position - just for driving a junkier car.

Edit: and they don't put unsecured debt onto their home.