How to handle a vehicle??

[SeaWolf]

I am Pre Ch. 7. We are going to be filing within a month or two.

I have a 2002 Dodge Dakota SLT QuadCab 4x4 with 106,000 miles. It is in excellent shape.

Truck is a V8 and the gas is killing me as the truck only gets 12 mpg.

We owe $8300 on the note and it is scheduled to be paid off in 26 months.

We have never missed or been late on a payment.

The truck is worth between 8000 and 10000 on Trade in depending who you use.

I have been entertaining the idea of trading it before we file for a economical 4 cylinder.

Problem is, the most I am being offered for my Truck is $7000. This leaves me $1300 upside down.

My credit score right now is 516. The interest rate offered from the stealership was 16%.

As far as I see it, I have a few options:

1. Swallow the $1300 and trade it now at the higher interst rate and reaffirm the new car

2. Surrender the truck and attempt to find financing after filing

2-A. Surrender the truck and buy a beater from a "buy here, pay here" lot

3. Keep the truck and pay it off at $349/month for 26 months

I am lost! Please help!!

[frustrated1]

Hubby and I are in the same dilemma. Dealer will only pay us $6,000 on the trade in since SUVs and trucks are worthless to consumers with these gas prices. That would put us in the rear for more than $10,000 and no one will give us a loan with our credit scores. We'll probably surrender it if we have to and buy a beater or share a car for a while.

[krielly]

I think I would hang on to the truck until you are discharged. It's possible your rates will actually be better AFTER the BK, as your credit score is so low now, it probably will improve.

You say your vehicle is probably worth around 8-10K. What are you basing this on? The reason I ask is that perhaps its not worth what you think it is, if that's all they are offering you. Of course, given your credit situation, the dealership is probably just trying to put it to you on your trade anyhow.

It's also possible, if your vehicle is not worth much more than you owe, to just surrender the vehicle.....you won't be liable for any difference between what you owe, and what the bank gets when they sell it. Remember, trucks & suvs are a REALLY soft market right now, and to a dealership - or anyone, they may not be worth book value anyhow, as the gas prices are so high, and sales are down so drastically on these........

Have you spoken with an attorney yet? They can let you know your options, and give you good advice about what would be best. Good luck!

K

[AngelinaCatHub]

SeaWolf: Here’s my take on your problem. You like the truck, it runs good, you can afford it, right? If so, pay it off, the difference in going “upside down” for a lesser vehicle is false economy as you could buy a lot of gas for the difference in an unknown used car or the difference of 8k over 13k. What the future holds for fuel could change and you would kick yourself later. If gas keeps going out of range, you won’t want to purchase it even for a four cylinder car. Think about this. ‘Hub

[Dennis1971]

There are no dealers in the our area (Indiana) that are taking a truck or suv in on trade right now. It was on the local news last week. The lots are full of them and they can't keep small economical cars in.
Good Luck

[CindyLou]

Go get the new vehicle asap that will get better gas mileage and give the truck back! But you need to do it before you are late on the truck. Don't tell the dealership you are giving the truck back. Just tell them you don't have a trade or you are going to sell it on your own. That's my advice. Gas will only get worse. This is your chance to make the trade.

This is definitely NOT the time to trade in with negative equity!!!!

[SeaWolf]

Update

Well, option 1 is out. The only financing I could find was on a new car @ $372/ month for 72 months at 16%. I could not live with myself on this knowing that in a few years after I file, I should be able to find much more attractive financing. Found out today that credit score has actually dipped below 500.

I think what I would liek to pursue now is to surrender my truck and find something I can buy for cash so I can eliminate a car payment all together for a few years.

What long term ramifications are there if I do surrender my vehicle voluntarily? Is this considered a repo and will it impact my credit in that neg. fashion?

If I do that, shouldn't I stop paying on my truck now? We plan to file within 30 days. Once that happens, how long can I keep it so I can bide my time until I find an appropriate set of inexpensive wheels?

Thanks for all the help!

[BigJohn]

What credit report are they showing you? Is it a report you can get a copy of or is a credit report only dealers can see?

Generally, dealers don't tell you they are looking at a credit report that only they have access to.

[spell]

If you're moving forward with a Chapter 7, I suggest you do this:
1. Retain an attorney to make sure you qualify. Find out what your local vehicle exemption is.
2. Stop paying on all debts you'll be discharging, including your truck. Start parking in the garage.
3. Buy the best vehicle available with cash near your state's vehicle exemption.
4. No longer care what gas costs, now that you don't have a truck payment. You can drive this truck 1000 miles for your monthly payment.
5. File the case.

[AngelinaCatHub]

I tend to agree with ‘Spell’. However, to answer your question, do not let them repo the car by capturing it off the street. Make arrangements with the Mortgage holder as to how to surrender it. Take pictures of it all around, make sure the man who picks it up on a roll back signs a receipt with the vin number on it. It is better looking as a surrender than a repo. ‘Hub

[dragonnfly]

I was in the same boat but more like $10000 upside down, we filed, surrendered the vehicle in the ch 7, and purchased a used small 4cylinder car with a payment half of what our durango was. This eliminated the $$ I would have had to pay being upside down, I do pay a higher interest rate but thats the price I have to pay. I did not have cash to by a dependable enough car to get to work. dragonnfly

[Cali]

I am surrendering my SUV and the dealership aren't coming to get it until after I discharge. So I drive it once in awhile.
I am going to purchase a better gas mileage car after I am discharged.

[SeaWolf]

If you're moving forward with a Chapter 7, I suggest you do this:
1. Retain an attorney to make sure you qualify. Find out what your local vehicle exemption is.
2. Stop paying on all debts you'll be discharging, including your truck. Start parking in the garage.
3. Buy the best vehicle available with cash near your state's vehicle exemption.
4. No longer care what gas costs, now that you don't have a truck payment. You can drive this truck 1000 miles for your monthly payment.
5. File the case.

So in this scenario I would surrender the truck?

It will take me awhile to save enough $$ to buy a dependable car. I think the Exemption limit in NC is $3250.

I thought about selling it private party, but I am worried that would negatively impact our likelihood of qualifying for a Ch.7