$14000 negative equity help

[JulieAlbright]

I suspect the OP might have disappeared.

Selling the car to reduce the debt might be good, the problem is that the loan right now is secured by the Car's Title in addition to the co-signor guarantee. The loan holder is unlikely to release their hold on the Title unless the OP has some method of securing the remaining loan amount.

[Weird Tolkienish Figure]

He owes $27,000.
Let's say he can get $10,000 for the car. That leaves him a $17,000 deficit. How will he pay the balance? I suppose he could get some king of personal loan if he qualifies.

As you said, he has to work and pay it off. But $17k is a lot easier to pay off than $27k.

Maybe if his credit gets better he could refinance or use the no-APR credit card strategy.

[disneysteve]

He has to sell it and drive a crapbox for a while.

He owes $27,000.
Let's say he can get $10,000 for the car. That leaves him a $17,000 deficit. How will he pay the balance? I suppose he could get some king of personal loan if he qualifies.

[Weird Tolkienish Figure]

The problem with selling the car is he won't get anywhere near enough to settle the debt, so that really isn't an option (unless dad is willing to pay the difference).

The only realistic answer here is what we said earlier - work more and earn more.

He has to sell it and drive a crapbox for a while. Once he's paid off the debt, hopefully he's learned his lesson.

[disneysteve]

Selling the car is probably a good idea. Sell the car, pay down the debt, then start over.

The problem with selling the car is he won't get anywhere near enough to settle the debt, so that really isn't an option (unless dad is willing to pay the difference).

The only realistic answer here is what we said earlier - work more and earn more.

[Weird Tolkienish Figure]

Not that I'm recommending this - because I'm not - but if OP were to file bankruptcy, wouldn't the co-signer (OP's father) be held responsible for the debt?

Yes I believe so. Basically that's your way out any debt though.

Selling the car is probably a good idea. Sell the car, pay down the debt, then start over.

[disneysteve]

Two ways out: bankruptcy or pay off the loan.

Not that I'm recommending this - because I'm not - but if OP were to file bankruptcy, wouldn't the co-signer (OP's father) be held responsible for the debt?

[Weird Tolkienish Figure]

I own an currently paying an auto loan for my 2013 Elantra GT. Before this vehicle I had been paying a loan on a 2007 g6, and before that a 2003 grand am. Both my previous cars ended up having big problems and I had to get rid of them(it wouldn't have made sense to repair them). Anyways, I accumulated $14000 debt which is now tacked onto the $13000 I paid for my Elantra resulting in a $27000 car loan at the age of 21 co-signed by my father. I am paying a ridiculous amount of money for this car and though I've been affording the payments it just isn't reasonable to be paying this much. Does anyone have any advice on what I can do now* ? Please no criticism on my past decisions .

You paid $27000 for a $13000 car essentially?

Two ways out: bankruptcy or pay off the loan.

How good is your credit? Might be able to funnel some of the money to a low apr credit card.

[ua_guy]

Uneducated borrowers not the lenders are at fault. Why is personal finance not taught in our schools?

The lenders share equal blame. Steve mentioned housing markets--they loaded up on subprime debt, lending to anyone and everyone, and they passed around that debt like a hot tamale. They knew it was a load of crap. Was that in their shareholders best interest if it ultimately collapsed their own markets? I don't think so.

But yeah, personal accounting should be taught in public schools. It is, to some extent, depending on where you go, and what class you take on an elective level.

[JulieAlbright]

In regards to advice in this particular case, I also got the feeling that the OP is looking for a way out of the loan.

2 main problems with that.

1. For many places in our country, no car = not being able to get hired for a job. I don't know if that is true for the OP or not. It really depends on public transportation and walkability of his area. But, defaulting or bankrupting out of an auto loan often means loss of the car through repossession or voluntary sale. It is likely much better to concentrate on making more money and getting the thing paid off.

2. Defaulting or Bankruptcy is just going to throw responsibility for loan upon his co-signor, which can be disastrous for family relationships.

I suggest number one sitting down with your parents and talking about the loan and asking for them to help finding a way out.

Then I realized that the OP asked for no criticizing of the past decisions that led to this. But really it is the past decisions that have caused this problem. I'm guessing given the OPs age, he is on about the 3rd car in 5 years. You need to STOP doing what a lot of people do in buying cars you can't afford and then not driving them long enough to make the purchase price worthwhile.

For instance, my own car is 8 years old and I suspect I won't even think about replacing it for at least another 8 years, and my financial position if much greater than yours. You can read around about finances and automobiles on many finance websites and in financial advice books but it all boils down to this. Cars can be wealth killers. That is what you are finding out here.

[disneysteve]

Uneducated borrowers not the lenders are at fault.

Uneducated borrowers are a problem too but if the lenders would be required to not lend beyond the borrowers means to repay, that would avoid a lot of problems.

Look at credit cards. They give credit cards to college students with zero income and then everybody gets all upset that students are coming out of school with thousands of dollars in credit card debt. Before getting a credit card, you should have to prove that you have a sufficient income to pay your bill.

Or look at the housing mess. At the peak of the fiasco, people were getting loans with nothing down, interest-only payments, with mortgage amounts of 4 or 5 times their annual income. There's no way they could afford that but the lenders were all too happy to make those deals. They had to know those loans would never get repaid.

[greenskeeper]

Uneducated borrowers not the lenders are at fault. Why is personal finance not taught in our schools?

[disneysteve]

I'm not sure how any bank let you roll that much negative equity into a new loan

So many of the debt problems in this country are caused by sloppy lending practices. As long as lenders keep giving ridiculous loans far beyond the ability of the borrowers to repay them, the problems will continue. Lenders need to become more like good parents and learn to say no, but of course that's no good for business so it will never happen. Nobody seemed to learn anything from the whole financial meltdown a few years ago. They're back to lending money freely to anyone with a pulse.

[ua_guy]

The bright spot in this dismal picture is that you've been smacked by life's challenges early on with time to fix the giant mistake and not ever repeat adding bad debt to new debt. [...]

Exactly this.

Although, I'm not sure how any bank let you roll that much negative equity into a new loan disbursement on the Elantra (usually they only allow ~120% of the car's value to be borrowed). Unless you didn't take an auto loan and did something like a personal line of credit.

[snafu]

The bright spot in this dismal picture is that you've been smacked by life's challenges early on with time to fix the giant mistake and not ever repeat adding bad debt to new debt. As mentioned, your number one task is to get work and resulting income. Tell everyone you know thst you need work. Most jobs are by referral from people who know you. Your job is to get a job so you should be out the door every morning to knock on doors, visiting landscapers, visit sites, visit restaurants where you might need to start as a dishwasher or morning prep staff. Don't worry about hearing 'No,' I think the ratio is 12 rejections for even a 'check back later.' Evenings add your ad to CraigsList or any free outlet to get work cutting grass/shovelling snow and drop off flyers in an area with potential.

If you're living at home, by mid afternoon do whatever you can to be helpful. Clean, do laundry, vacuum, prep meals, set table, take out trash, look after your best resource. I hope you get unemployment...with the rates so low, you are at risk. Wishing you best luck in your quest for employment.