Gifting a Car With Debt?

[questions]

I am hoping you can answer my question!

Earlier this year, I gave my sister my car as a gift, since the title was completely paid for using my student loan, and because she desperately needed a car and I no longer did. Unfortunately, I just found out that my student loan balance has jumped from $30,000, the original amount, to $50,000, because of interest and years of deferment.

Should I tell my sister about the $20,000 increase and ask her to help me pay off the debt as she is now driving the car? Should I sell the car and put the $4-$6K profit toward the student loan debt? Or should I keep quiet about my oversight, bite the bullet, and pay off my student loan while my sister continues to drive the car without any payments whatsoever?

[jpg7n16]

I am hoping you can answer my question!

Earlier this year, I gave my sister my car as a gift, since the title was completely paid for using my student loan, and because she desperately needed a car and I no longer did.

That seems very generous of you. But note that if you gifted her the car, it's legally her's. You don't have any say in what goes on with the car. If she's just borrowing it, that's a different story

Unfortunately, I just found out that my student loan balance has jumped from $30,000, the original amount, to $50,000, because of interest and years of deferment.

Whoa wait... you gifted the car earlier this year. Did you not know that you had student loans at that time? Something's not right with your story here. The balance didn't jump from $30k to $50k in 1 year because of interest. That's a 67% increase. You should have been aware of that when you originally gave her the car.

And if the extra $20k came from shifting your car loan debt, then you knew about that already. If you just went from $30k school loans and a $20k car loan -- to a $50k school loan and $0 car loan -- you still owe the same $50k, just to different places. And you would have known this at the time of the gift. $20k of debt doesn't just magically happen in one year.

Should I tell my sister about the $20,000 increase and ask her to help me pay off the debt as she is now driving the car?

That's really up to you and depends on the relationship you guys have, and the conditions you gave her the car in the first place. Really, what is she supposed to do w/o the car?

Besides, the car didn't create the extra debt. They are really unrelated issues.

It wasn't like if you gave her the car you'd owe an extra $20k, but if you kept it you didn't owe any more.

Should I sell the car and put the $4-$6K profit toward the student loan debt?

If you truly gave her the car, this is not an option. She owns it, therefore you don't get to sell it - only she can.

Or should I keep quiet about my oversight, bite the bullet, and pay off my student loan while my sister continues to drive the car without any payments whatsoever?

I sense some bitterness here.

Remember, you gave her the car to help her out. There's no need to resent her for not having payments, when you originally gave her the car intending to help her avoid having to make payments.

My point is, her not having payments is the very reason you gave her the car in the first place.

[disneysteve]

First, let me remind everyone that "questions" is not an actual person. It is a collection of questions sent in to the website from people who aren't registered users. So we are unlikely to get any response to our comments from the person who actually asked the question.

That said, I totally agree with jpg. This isn't your sister's problem. It isn't her fault that you racked up all that student loan debt and let the interest build up. Why should she have to give back a gift?

Let's imagine a slightly different scenario. Instead of gifting the car to your sister, what if you had donated it to charity? Would you now go back to the charity and say you want your car back so you can sell it to help pay your student loans? Of course not and this situation is no different. A gift is a gift. It is no longer yours. The recipient has absolutely no responsibility for your student loans. Move on and let your sister continue to enjoy your generosity.

[bjl584]

I am hoping you can answer my question!

Earlier this year, I gave my sister my car as a gift, since the title was completely paid for using my student loan, and because she desperately needed a car and I no longer did. Unfortunately, I just found out that my student loan balance has jumped from $30,000, the original amount, to $50,000, because of interest and years of deferment.

Should I tell my sister about the $20,000 increase and ask her to help me pay off the debt as she is now driving the car? Should I sell the car and put the $4-$6K profit toward the student loan debt? Or should I keep quiet about my oversight, bite the bullet, and pay off my student loan while my sister continues to drive the car without any payments whatsoever?

Is the car still in your name? If not, then you have no claim to the car. It is the property of your sister. Perhaps she will be as charitable as you were to give her the car in the first place and help you out with your debt. Maybe she will be willing to sell the car and give you the proceeds. But, more than likely, you will need to find a different way to pay down your student loans.

If the car is still in your name, well that complicates matters. Technically, you could sell the car right out from under your sister, but then you would have to deal with how that would effect your relationship with her.

I would forget about the car and find another way to pay down your student loan debt.

[jpg7n16]

Let's imagine a slightly different scenario. Instead of gifting the car to your sister, what if you had donated it to charity? Would you now go back to the charity and say you want your car back so you can sell it to help pay your student loans? Of course not and this situation is no different. A gift is a gift. It is no longer yours. The recipient has absolutely no responsibility for your student loans.

I think this is a really good analogy of what happened.

[nick__45]

I am hoping you can answer my question!

Earlier this year, I gave my sister my car as a gift, since the title was completely paid for using my student loan, and because she desperately needed a car and I no longer did. Unfortunately, I just found out that my student loan balance has jumped from $30,000, the original amount, to $50,000, because of interest and years of deferment.

Should I tell my sister about the $20,000 increase and ask her to help me pay off the debt as she is now driving the car? Should I sell the car and put the $4-$6K profit toward the student loan debt? Or should I keep quiet about my oversight, bite the bullet, and pay off my student loan while my sister continues to drive the car without any payments whatsoever?

All deadbeats start out acting like hot shots but they're nothing but hot air.

[photo]

I wholeheartedly agree with the others.

How would you like it if your sister gave you a car and then later said, "I only gave it to you when I thought I could afford it. Now that I realize I can't, I want my gift back"?

If that doesn't work, then imagine you are newly married and someone who gave you a nice gift asks for it back several months later because he miscalculated and now needs the money that he spent o the gift, for himself.

A gift is a gift.

[Eric80]

This is a tricky situation as you dont want to upset your sister- but i do think that you should sit down and explain the situation with her - she may surprise you and be understanding ans sympathetic- however there is another way in which you can resolve this - may be consolidating your debts or IVA?