Should We Surrender Another Vehicle? What Are The Chances They Will Sue?
Here's the background......on the verge of bankruptcy, even hired a lawyer and drew up all bk papers then decided it was not the best choice for us. Have almost $75,000 in unsecured debt -mainly credit card debt but $15,000 of this is balance due from surrendered 2003 Nissan (given back in April 2003). Secured debt totals almost $15,000 but this includes a Time-share that has already been surrendered and Wicks Furniture that we plan to negiotiate a settlement.
We own one vehicle outright '92 Infinity worth about $2,500 and have a loan with Harris Bank for a 2001 Ford F150 that still has 3 1/2 years left on the loan at $432 a month payment. We were behind on the truck payments previously but have since been caught up. We have not paid any credit cards for a whole year except for Wicks and Rogers & Hollands which we stopped paying 4 months ago since we we were afraid they would take our furniture and wedding rings. Even with not paying any of these account all of these months, we are making ends meet. My husband and I are both independent contractors and our income various weekly/monthly and gas expenses get pretty high. We are out of money each and every paycheck, sometime overdraft checks, and occasionally have to borrow money from family.
We feel right now the best first step is to stop the financial bleeding by eliminating as many bills each month, closely monitor all spending and put some money aside each paycheck off the top to build up to make settlement offersin the future. We are not going to attempt to settle ALL of the credit card debts, only the ones that are going to court. We doubt many will waste their time and money seeking judgements against us since we do not own any property or assets.
Question: my husband thinks we should also surrender the Ford F150 next month and purchase a used truck for his work for $3,000-$4,000 with cash I will be receiving from a lawsuit for a car accident. (I will only be receiving about $8,000 so it is not enough money to solve all of our problems). Our credit is already shot to hell so this additional vehicle surrender won't make much difference. I am just concerned about the balance left after they sell the Ford since we are upside down on the loan and will Harris Bank sue us? Also how likely is it that Nissan will sue for the $15,000 balance if they see no money and no assets?? 
We plan to start rebuilding our credit from this point forward whether we surrender the Ford or not but does it makes sense to pay $432 a month for a vehicle when we don't have enough money to pay for gas and my husband's school?? This might be are only opportunity to get out of this big loan and just add it to the big pile of debt.
I could use as much insight and advice that anyone has to offer. Thanks in advance for your help!
Wow, Sounds like you're having a rough time! Got to be stressful! Normally I'd be joking about stuff but this is not one of those times.
It sounds like you've got a good handle on your situation even if you can't do much about it. I commend you. It's hard to keep sight of the big picture , much less be proactive when you might be scared to go to the mail box everyday.
You're both kind of right about the truck. Since you have a little time, try to sell the truck first to pay it off. If you get an offer close to what it's worth try negotiating with the lienholder. It's probably more then they will get if it's repo'ed and sold at auction. Be truthful with the lender.
Your take on the credit cards seems right.
Look in the posts here and go to one of the credit repair message boards like www.creditinfocenter.com & read up on the FDCPA (Fair Debt Collection Practises Act) and the FCRA (Fair Credit Reporting Act). Even in your situation you have rights that creditors and collection agencies (know the difference!) may try to abuse. Education will tell you what they are.
Make sure you can eat and pay your rent. Being homeless is way past hell
Try to stay positive. Things will get better!
Best Regards!
Marty
Search www.creditboards.com for "litigious mind set" and start collecting FDCPA and FCRA and TILA (Truth in Lending Act) violations on your adversaries. You can certainly get better deals (perhaps even make money on this mess) by doing so. Don't forget www.creditnet.com.
eBay may be a good alternative for selling the truck. We've sold 2 cars on eBay and been very happy with the prices we got. Clean it up good, and put on lots of high-res digital photos. Get a friend to help if you don't know how. Also, check other auto sales for boilerplate terms of sale to insert in your listing. You might even come out ahead! F-150s are in high demand (most popular vehicle in the country!)
Hi last year I had a expert on my television speak about the lemon law and car repo's I am on GETV in Glen Ellyn Illinois.
For one I am not clear to why you stopped the bankruptcy and how much reporting was already done to your credit sometimes court cases appear on your report before you go into court thus lowering your credit score.
I just was helping a woman out in Chicago with the issue of debts appearing on her credit file that she had no account with and they still came on her account as a bad rating, so if I were you call up and get your most current credit report from TRW and the others.
As for the car the bankruptcy would have only given you a little time to buy off the debt the amount owe would be less if I recall because some of the fees are waived but you have a number of months to paid off the debt in full.
Also it would have stopped for a while the other car from being repo for a time as well. The credit has the right for possession of the vehicle but it stops harrassment.
The other bills at one point your debt would have been erased with chapter 7 yes it would have took you years to get the bk off your record but it also allows to in many cases to get new credit months after.
6mos to 1 yr to purchase a home by some lenders
new credit right away
new credit cards one yr
all because they know you can not file again for years later and many will take the risk based on your finances and ability to payback.
There are also law firms who specialize in debt redeuction by buying down interest rates, fee fees and other charges.
Since you are in Dupage County call Pairie State legal services for free legal advice and if you need addition help you can call me, but I charge a fee and do referals to others that may be able to help get you straight.
I would as a advocate via my show and do a lot of referals to agencies many don't know about.
[ Edited by joel on Date 01/11/2004 ]
We decided not to proceed with the bankruptcy because the majority of our debt is unsecured credit cards which can be negiotiated, settled, or just written off by the CA's when they see we have no money. (By the way, I got in this situation from having a medical leave of absense in Feb '02, left job in May '02, divorced in July '02 and later remarried. Now my current husband and I earn half of what my ex-husband did but I still have all of my credit card debt that is in my name from those high spending years).
We wanted to originally surrender the F150 in the bankruptcy and purchase a used truck outright but the lawyer said we would have too much equity in the two vehicles and would end up having to sell one of them. Since my Nissan payments were $630 a month, that was given back last spring since we were not even close to being able to pay each month. So we thought we would come out of the BK with just the truck payment of $432 and start rebuilding our lives but now we are strapped each month with this loan. We are even unable to afford health insurance (we have to pay for private insurance since we are both self-employed) and I have had 4 brain surgeries in the past.
Another big reason we decided against BK was being able to have control in our hands. I really had a problem just handing everything over to the courts - yes, I would have gotten all my debts wiped away with Ch 7 - but then having a BK on my record for 10 years that would be the first thing popping up. Even after 10 years, we would be faced with the "Have you EVER filed bankruptcy" question which I don't think is fair. Nobody asks you "Have you ever not paid your bills on time?"
I would much rather have the power in my hands to negiotiate and settle these debts which I have experience doing with my ex. His credit was a mess when I first met him with 2 judgements and I straighted it out by settling the accounts with the CA's and cleaning up his credit reports.
In addition, since I have had such serious health issues and could be faced with something again down the road (like brain surgery), BK would be better served to wipe out medical bills. Even if we are able to pay for the health insurance, I have been told that any problems with my head "brain" would not be covered for years or maybe never. BK would be a better ace up our sleeves for that problem.
I recently read part of a book titled "To Pay or not To Pay" which talked about suing your credit card companies in a very proactive plan to have all of your debt wiped away. Does anyone have more info on this action and how successful it is??
Thanks for the advice on selling the F150 on our own and negiotiating with the bank. We will definately look into that. Originally (last fall) when we told the bank that we wanted to surrender the truck, they asked us to take it to CarMax for a quote and fax it to them since CarMax would pay more than an auction. I need to call and get an exact payoff amount for the loan and see how much we could get for the truck ourselves and how much we would have to settle with the bank. I should have also done this with my Nissan but we were so overwhelmed with all of this last year and 3 months behind in payments that we ran out and bought a used car for me and jsut gave the Nissan back to the dealer.
I am also going to get copies of our credit reports to see what is on there. I do not want to pay a lot for these reports for my husband and I so I was thinking that I should try applying for credit and then when I am turned down I can get a FREE credit report within 60 days. Do you think that is a good idea or do you know how to get our credit reports inexpensively.
Thanks again for any input or advice. [ Edited by TessM on Date 01/11/2004 ]