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About to let the car go, big negative equity need help please

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    #16
    Originally posted by disneysteve View Post
    Absolutely. Filing bankruptcy over 15 or 20K makes no sense. A simple PT job would clean this up.
    I just don't think OP wants to pay the debt.

    Comment


      #17
      Originally posted by DebbieL View Post
      I just don't think OP wants to pay the debt.
      I agree with you. That's my sense of the situation, too. I was just trying to give him the benefit of the doubt and try to help if he actually wants help.
      Steve

      * Despite the high cost of living, it remains very popular.
      * Why should I pay for my daughter's education when she already knows everything?
      * There are no shortcuts to anywhere worth going.

      Comment


        #18
        Thanks for your guys posts..

        I dont have a occuring history of irresponsible financial decisions. This was the irresponsible decision. As i stated my credit score is in the 720's, and I have multiple cars paid off on my credit.


        Ok in 4-6 years I could pay it off, considering I dont have a car (or car payment). Thats the predicament. I gotta get to work/ school. Trust i dont WANT to do this. I have no plans to buy a house, hate to say its the California way, but condos and apartments are fine.

        I just got off the phone with a bankrupcy attorney..
        He says I do qualify. Although he stated if I stay with building my credit i can be back at the score i have now come 2-3 years...(I dont know if this is true or not at this point).


        So i basically need to figure out what to do about a car, and seeing if I can find a second job if I choose to keep the car/ sell the car...get a loan for the negative defficiency...get another car and a second job. ... working 2 jobs for 4 years? ... damn.

        I appreciate your guys advice and comments and they are very much taken into consideration.

        Yes the car is 20k negative. Ive researched it thouroughly.

        Comment


          #19
          How are you 20K upside down on a Mustang? Did you buy it new? The most you can pay for one is around $36'ish. The only way I see that happening is if you rolled another upside down car into it on trade, cause I don't think the car would have depreciated that much already.
          Brian

          Comment


            #20
            Originally posted by codeman View Post
            I traded in a car (i know mistake) and took a hit.
            Originally posted by bjl584 View Post
            How are you 20K upside down on a Mustang?
            OP said he traded in another car and "took a hit" when buying the Mustang. I assume that means he rolled the old loan into the new loan.

            Originally posted by codeman View Post
            I have multiple cars paid off on my credit.
            You've said that. First off, I'm not sure what that has to do with anything. Secondly, at 27, how many cars have you had? If you got your license at 16, that's 9 years. I've been driving for 31 years and I'm on my 4th car.


            Ok in 4-6 years I could pay it off, considering I dont have a car (or car payment)
            So when you say you could pay it off in 4-6 years, you mean if you sell the car today, you could pay off the difference that you'd owe in 4-6 years? That's now how I took your original comment.

            Bottom line remains the same. We need to see numbers to help you in any meaningful way.

            Just because a bankruptcy attorney told you that you qualify doesn't mean it is a good idea or the right way to go. Of course he wants you to file. That's how he earns a living. We're a bunch of impartial strangers who don't benefit one way or the other. Lay out your situation here and get some real advice before taking a step that you may later regret.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #21
              alright sir.. (and thank u for the response steve)


              Income after taxes/health insurance is 2250

              Monthly Bills:
              920 -rent
              40 - electric
              45 - internet
              30 - Other utilities combined (no house phone)
              120 - Cell phone (in contract until december tried to end it already)
              70 - Minimum Credit Card payments combined
              Credit Card 1 balance 450
              CC 2 balance 250
              CC 3 Balance 1120
              280 - Food
              90 - Gas for Car
              120 - Insurance for car (yes I have tickets)
              666 - Car Payment

              Total = 2381

              Ive basically made up for the negative the past few months putting a tank of gas on a CC, and eating at $25 some weeks

              Comment


                #22
                This video sums it up:

                Rent: Too Damn High! Song. - YouTube

                Rent = 41%

                Suggested max is 28% = $630


                And yes, obv the car portion is too high as well.
                Last edited by jpg7n16; 03-29-2012, 10:05 PM.

                Comment


                  #23
                  I understand why you are focusing on the car loan. Even when you were earning $600 more each month, you couldn't afford that car. Your car payment shouldn't exceed 10% of your income (for no more than 3 years). At $2,850/month income, $666 was over 23% of income and it is a 6-year loan. Now, at $2,250, it is about 30%, three times what it should be.

                  That is not your only problem, though. As jpg pointed out, your rent is way too high also. And again, even before your income fell, your rent was too high (over 32%) and now even worse at 41%. When is your lease up so that you can move to a cheaper place? Is it possible to take in a roommate to share expenses now?

                  One thing you can do immediately is slash your food spending. $280/month for one person is way high. Knock that down to $150 and that frees up $130/month for debt reduction.

                  As for the cell phone, you can always end a contract early. There is just an early termination fee to pay. Find out how much that is and figure out if it is worth paying. Let's say the fee is $200. If you keep the contract for 9 more months, it will cost you $1,080 plus taxes. It probably pays you to pay the fee and get out of the contract.

                  As for the car, clearly you can't keep paying 30% of income towards it. Hopefully you are actively and aggressively looking for a better full time job, but in the meantime, you need to boost your income any way you can. Get a 2nd job. Heck, get a 3rd job. Deliver newspapers or pizzas, mow lawns, be a waiter, take an overnight stock position at a retail store, whatever you need to do to make these numbers work.

                  Your budget is only upside down by $100/month. If you can't figure out how to earn $100/month, you aren't trying hard enough. My 16-year-old daughter earns $160/month babysitting one day a week after school. Get out there and find another job. Work on finding a cheaper place to live. Cut your food costs. Do all of that, and you can clean this up.
                  Steve

                  * Despite the high cost of living, it remains very popular.
                  * Why should I pay for my daughter's education when she already knows everything?
                  * There are no shortcuts to anywhere worth going.

                  Comment


                    #24
                    For 1 person, you could spend less on food. I agree with the above poster that the rent is also too high for your income. Is there any way to relocate, or possibly find a place with a roommate?

                    Getting a 2nd job would certainly help.

                    I work full-time, plus do 2 part-time bookkeeping jobs on the side, as well as attending night school to finish my degree, run 6-7 miles a day (in my "spare" time, lol) - and I'm 41 years old and have energy to burn on top of all that. At 27 you are still a baby and should easily be able to handle a bit of side work. Work a part-time job at least for awhile - or until you can find a better paying full-time one.

                    Good luck!

                    Comment


                      #25
                      Originally posted by codeman View Post
                      Income after taxes/health insurance is 2250

                      Total (Expenses)= 2381
                      Just to put some math to work to show how our suggestions can help:

                      Already reviewed your biggest weakness (car payment) and determined there is no reasonable alternative for the car at this time. Time to move on to your other options. (At current payment amount, $40k will be paid off in 5.75 years)

                      Current shortfall: -$131

                      Reduce rent +320
                      Reduce food +100
                      Cut phone bill +50
                      --Total: +$470/month

                      New budget surplus +$339

                      Now adding that to your current car payment to accelerate your loan payoff: new payment amount = $1005; completely paid off in 3.6 years

                      Add a 2nd job making $500/month, paid off in 2.35 years.

                      -------------------------------------------------------------------

                      But even still, I wouldn't necessarily set a goal to pay it completely off. I would set a goal to pay it down enough to refi/trade down in car (thus reducing the payment to a more reasonable amount). To do that, you'll likely only need to pay off $25-30k or so (assuming your car will fall in value over the next 2-4 years)

                      By implementing the suggested budget changes, you'd have the loan paid down enough to refi to a smaller payment in 2.19 years (2 years and 2 months). Getting a 2nd job, you'd be there in a year and a half. I'd prob do the 2nd job for about 2 years, pay the loan to under $10k, then refi.

                      Then you can refi to a smaller payment ($10k balance on a 3 year loan = $300/month), thus clearing up your cash flow situation, and quit your 2nd job.

                      Ive basically made up for the negative the past few months putting a tank of gas on a CC, and eating at $25 some weeks
                      Didn't notice this the first time. But buying it on a CC doesn't mean that you made up the difference. You still spent more than you made. You just happened to borrow to do it.

                      Cutting the food costs down certainly shortened the gap.
                      Last edited by jpg7n16; 03-30-2012, 11:27 AM.

                      Comment


                        #26
                        Originally posted by codeman View Post
                        alright sir.. (and thank u for the response steve)


                        Income after taxes/health insurance is 2250

                        Monthly Bills:
                        920 -rent
                        40 - electric
                        45 - internet
                        30 - Other utilities combined (no house phone)
                        120 - Cell phone (in contract until december tried to end it already)
                        70 - Minimum Credit Card payments combined
                        Credit Card 1 balance 450
                        CC 2 balance 250
                        CC 3 Balance 1120
                        280 - Food
                        90 - Gas for Car
                        120 - Insurance for car (yes I have tickets)
                        666 - Car Payment

                        Total = 2381

                        Ive basically made up for the negative the past few months putting a tank of gas on a CC, and eating at $25 some weeks
                        Hmmm. You might not be able to get out of your cell phone contract right now, but you can drop Web and texting and more than likely downgrade to a plan with fewer minutes. You can get that bill down to at least $80.00/ month, which gives you $40.00 extra right there.

                        Other than that - get a part-time job. Become a server, work in a bar over the weekends, find a night-time job in a cell phone store like AT&T or Verizon, etc....as has already been said - you only need about $100.00 extra per month - that is very easy to achieve with almost any part-time job - no matter how pathetically low the pay.

                        Comment


                          #27
                          Pay it back please!

                          Please just do everything in your power to pay back the loan and keep the car! Forget about another car. Sell things, take another job...do whatever you have to but pay it back. A car loan to me is secondary to any home loan but you can do this! Just encouraging you to do what you know is right! Joe Hoye

                          Comment


                            #28
                            I'm inclined to suggest keeping the current car and paying it off, since you can afford it if you cut down on other expenditures. Unpleasant, yes, but as others have pointed out, bankruptcy may be technically over quickly, but it still has unfortunate and awkward longer-term consequences. I've listed some of them in my (free) e-book on my website, in case you want to take a look (the domain is the same as my user name here, but it is co uk - debt management under the Money menu).

                            Why have you "got to" change the car? Answering that may help us come up with some ideas. For instance, why change it for something that is going to cost you $10,000 *plus* interest (so, $20,000 maybe)? Why not buy a second-hand pickup truck for $1500 and drive that? Who are you trying to impress? Is it a vehicle or a status symbol you need? Why is it worth $20k to you? Are there not other ways to get to where you have to go? Maybe you don't like the bus. So what? You get what I'm saying here, right?

                            As others have said, you may be able to cut down on some of your other expenditures as well - fairly easy compromise now can build a really good future for yourself a decade or two down the line.

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