Should this person give up their car?

Given the circumstances below, I am trying to find the effect over a year or two for this person to give up their car — defaulting on the loan.

This person asked me for advice, and it was beyond me – let me know if you have the answer and some way to justify it against helping their credit score:

The person is paying on a car, has had it 1 year, and is getting charged 18%+ interest.

They now owe more than the original cost on it, due to penalties and late charges. They have been late 10 of the last 12 months, and are 60 to 90 days past due each month. There is no spare income for the person, and this will continue if they keep the car.

Their credit already very poor. About 500.

They can no longer make the payments. Or better put, if they try and make the payments, they will be reported as 60 or 90 days late for the next few years. They cannot make them on time as they have other significant debt. The person has already exhausted arrangements with the loan company or their other loans. They have no excess cash.

If they give up the car now, and then in a few months, are able to begin making other payments (utilities, and other debt, etc.) on time for the next year to two years, will their credit improve and can someone estimate how much? They have no revolving debt, but do have past due accounts. They do not have a home, but rent.

Or, will this defaulted car loan nullify any other positive credit moves the person makes in the next year to two years?

The person said the loan company will sell the car, but there will be a gap between that sale price and what the car is worth (makes sense). The gap will be about $4,000 to $6,000 from the deficiency of what the car is worth versus their loan. If the person has other significant debt, can they expect this company to let them make payments anyway on the deficient amount or will they demand it all at once?

Again, they are past the point where they CANNOT consider options like refinancing, making arrangements with the dealer, etc. They want to know if the default on this default can be offset right away with better payments on other debt, and raise their credit score, or if this default will keep them at very poor credit over the next year or two.

How long will the default stay on their report, and will it prevent them from getting approved for a mortgage in the 2 to 7 year timeframe, assuming they can get other payments in line?

Don’t know about the credit score stuff, but the definitely cannot afford the car. It needs to go. Turning it back to the bank is not always the best deal, but sounds like all they can do right now. As for credit score – I would look more into paying cash for things. The next car needs to be paid for in cash – a beater or whatever, but no more debt.

I can’t answer many of your questions. But from my ex-husband’s experience I can tell you one thing for sure. If this person gives up the car it will be sold, usually at auction and usually for less than it’s worth. Then the loan company or bank will come after this person for the difference in loan value minus selling price. Where my ex lives that means for about 12 weeks his pay was garnished, 3 to 6 weeks free, then another 12 of being garnished. And each round there is more in legal fees, interes, etc, so the amount due won’t decrease fast. My ex had to deal with it for seven years before the statute of limitations went into effect. Oh, and they went after his tax refund as well, I believe it was only his state but I’m not sure it happened about 12 years ago.

Bankruptcy vs Debt Settlment

Hello Friends,

I am debating whether to solve my debt problems by filing for bankcuptcy vs. debt settlement.

Can you folks share your experiences with me? Pros and cons would be helpful.


This is hard to answer not knowing what steps you have taken to date. how much debt.? what is your long term goal….. If I had a choice I would do debt settlement. But way before I go through that route I would make sure I have exhausted every possible avenue to take care it yourself.

tough desicion, first question I would ask is what state do you live in, that makes a difference. The difference being: what can your creditors do to you, can they easily pursuing you non-payment.

Next how much debt do you have, what kinds: credit cards, loans on cars, boats, other toys, taxes, student loans, mortgage.

Finally: where would the money come from for debt settlement: that one is important. Because if you chose to file bankruptcy they would ask you the same question. If you ahve the ability to get money to pay your debts, you cant file bankruptcy in most cases. If you will give me some more information I can help you. I was a professional debt collector for 15 years and dealt with the largest banks in the country. I can offer more suggestions for solution, but I need to know other details. let me know.

I’m also in a similar situation. I have about 100k in unsecured debt and defaulted on my 4 largest creditors. I’ve made arrangements to pay in full over time my smaller creditors which I hope I will be able to do. I do not want a chapter 13 plan and believe I can pass the means test for Chapter 7. However I am currently negotiating with collection agencies for 3 of them and waiting to hear from the 4th. I live in New York and am current on all secured debt(mortgages,HELOT and car loan). I do not have enough income to pay my debts in full and don’t want to use exempt assets to pay the unsecured debt. Any ideas for those of us in these situations would be welcome.

With the debt load you have, you should be discussing settlements with the collection agencies. but dont do it through a debt settlement comp. that can cause you bigger problems.

Help with some information please

I have received some letters from an attorney in Fresno, CA. They are threatening judgment on me, etc. They represent an outfit called Unifund CCR Partners. I’ve never done any business with either the attorneys OR Unifund. My attorney has called the Fresno attorneys who will not state if Unifund is a “cover” for Citibank, Mastercard, or whomever.

Any thoughts or ideas for help? Thanks all very much.

Send them a debt validation letter. Check and see if the letter you received from them mentions debt validation rights. If it doesn’t then they could be in violation of the fair debt collection practices act and you can sue them in your local court for at least $1000. If your attorney does not know how to go about demanding proof of the debt, get a new attorney. You have the legal right under the Federal Law to have proof that you owe the debt, meaning copies of the original bills.

I don’t really know what to tell you but I can tell you that both my husband and myself have at one point or another have been on the receiving end of this and truly these “attorneys” turned out to be a bit unscrupulous, unethical and downright slimy to say the least. Try not to let them fluster you first off. That’s their game. They come at you hard and with alot of threats. In one case my DH had an attorney harass him at work and threaten all sorts of things.

This was a few years back and we were’nt as knowledged as we are now about the FDCA etc. This attorney managed to scare my DH into paying on a debt that the statute of limitations expired on for one. They violated the FDCA regulations right and left but we did’nt know it at the time. If you have an attorney working for you already I would’nt worry. Let him direct you on what to do. Have Googled this Unifund? With the internet you should be able to do some research on them and get some answers. Sorry I’m no help but I hope you get it worked out. I did Google the company and found that apparently this Unifund/CCR buys old debts and then makes a stink with everyone. I’m not going to get flustered (I hope LOL) as I’ve been through a bunch of this stuff already.

You always should get the policy and the monthly deductions

Not sure how you can lose money, if you have life insurance even if your rep quits the business the policy is still in your name and owned by you. If you had a loan you got money you need to pay it. If you have a mutual fund its your money, and in your account. The rep just brings your money to the mutual fund company and gives it to them where they set up an account in your name.

When you buy an insurance policy you always should get the policy and the monthly deductions to pay for the insurance should link you to an account number. If you have a mutual fund your account is with the mutual fund company not the primerica rep. And all 401Ks should send monthly or quarterly statements as to how your account is doing. If you transferred money into an account then you should be able to find an account number. If they are deducting funds from your account you can always just call them and get the account number.

Folks, you have to keep documentation of the things you buy and the stuff you have. If you lose these important documents you can and should not really blame anyone but yourself. I am sorry to say that, but in all my financial struggles in life thats one thing for sure that I have learned. Keep your paperwork, its not your reps responsibility its yours!

Is debt consolidation loan a good idea?

Hi all,

Well, my post from yesterday is still not on here, but neither are any other new posts??? My questions from that other message still apply, but I also have a new one and I hope that it gets posted and answered soon since the bank will close in a few hours! So, here goes!

Ok, so yesterday I called USAA, one of our banks, and spoke to the financial advice center there. The only thing that the girl said that I didn’t already know was to look into a debt consolidation loan. Well, I knew about them, I just didn’t think that we could get approved.

Will that bank, we can’t. But, Navy Federal I think has approved us. It should have the final stamp of approval today. It would be for 25K and would pay off the credit cards and our home equity loan. The only reason I want to pay off the equity loan is that I think then maybe we can actually sell the house because we could drop the price 10K- we could downsize. The payment on this loan is about 600 a month- which is about 100 more than our current min. payments on everything now. We aren’t able to pay all the bills for the first time ever as of this month. Right now, nothing is more than 14-21 days late, so it has not been reported yet.If we get this loan, I could make the payments before they are reported and the first payment would not be due until the end of Oct. I am going to ask if they can move that to Nov to buy us a bit more time, but I don’t know if they can. We are planning on having our in home daycare open by then, or maybe hubby will be in a great paying job in Afghanistan. but if those things don’t happen we will still be unable to make all our bills.

So here is the question. Should we do it since we would actually have a payoff date for everything this way and actually be making progress with the bills/ credit cards since they would all be combined in to one? I also thought that maybe it would be easier to work with one bank where we have a great history if we can’t make a full payment on just one loan than it is to try to work with all these different creditors. If we end up still having to file BK (and I am hoping that maybe this can prevent it) I don’t think it will matter if we have just hat loan vs having a bunch of different debts?

Let me know your thoughts and experiences pls…. This is all so new to me and it seems like a last chance!

M wife and I learned (as many others we later found out) why Dave Ramsey (website) calls them debt CON-solidaton loans. If you have not changed your habits, in 2-3 years, you will have racked up the cc’s again and, oh by the way, still have the CON loan to pay. Now you are doubly in debt. If, you will cut-up all cc’s, close the accounts and never, ever, borrow again, then a Consolidation loan may be a good venture. But, be warned. There are many people on this board who have wound up like us.

Our loan would save us about 225 a month vs not getting it and paying just our min payments. See, it would allow us to pay off enough of one vehicle (which we never use but have to keep fully insured as it is financed and have not been able to sell in 9 months) so that we can sell it. Just selling it and not having that payment and insurance would save us the amount of the monthly payment on the new loan. We had great experience with payday loans company called TnbLoans, and now we are looking for a similar provider offering debt consolidation loans. And, it would pay off all but one CC and would take a chunk off of that, thus lowering the min payment for that one. Plus, it is easier to work with one bill than a bunch of different creditors, rights?

Any other thoughts?

ya…I’ve been there and told myself this same story but 4 years later I am eagerly anticipating paying off this consolidations debt. It just never is as good as it sounds no matter how hard you try to spin me. Or dont, then talk to me in a few years. We paid off a vehicle, and now it sits in our driveway not running- two years into the consolidation debt the vehicle decided to have problems.. see where I’m going with this?. We paid off other stuff.

But what happens is you accumulate other stuff too in the process. The truth is, if you are willing to take on debt then you dont have your finances under control. This is just what I’ve learned. Once you finally make the connection that you dont need credit cards, refinancing, consolidation, etc. That’s when you finally become free from debt. Yes you still have to pay back what you already owe or file BK, but the realization alone is worth its weight in Gold. No one can make you realize it. You have to come to this on your own. I know I can talk until I’m blue in the face but there will come a day when you realize what I’m saying.

Yes, but in some places you just have to have a vehicle. If you don’t , you just can’t get to work. No work no money. Getting to work and getting that money coming in is the most important thing. Is not a luxury

Company called Primerica

Has anyone had any experience with a company called Primerica? I’m not sure what all they do, they call it financial planning, but it sounds like debt consolidation and investing. I know they have their own mortgage company, but I cant really find too much about them on the Internet.

Primerica is owned by Citigroup. It’s a part of Traveler’s Insurance. Check out this article that appeared in the New York Times –

Also Google Primerica and take a good look at the first two pages of SERP results. There have been a lot of complaints against this company.

I looked into them once, what it boils down to with them is all about the life insurance sale… They suck you in with all the promises of making money and helping your financial freedom, but it IS ALL ABOUT LIFE ISURANCE. I went to the class, enjoyed everything I learned, but was very turned off in how they were all about recruitng people …. wasnt my thing so I didint pursue it any further.

they tried getting getting a list f my friends te very first meeting and wanted to call them to pitch there deal.. I stayed in for a bit longer for the possible prospeccts of being able to help people, but realized I had better plans then they did anyway, they are banked by a heavy bank but what good is that today.. I am still strivivng to help people especially with all the issues these days but I personally couldnt do the primerica way..

hope this helps.. I am not saying they arent for some people just wasnt for me. but read through evaluation seminar they give and ask lots of questions….

Will be honest with all of you, I am a primerica representative and have been for about a year.

For me it was an opportunity to help folks. Yes we do sell life insurance, we do advise folks to get term and invest the rest into a mutual fund. We can do debt consolidation as well, ie loans. We are currently owned by Citibank but Primerica has been around lonnnggg before citibank bought us. They can and often ask for a list of people to show what we do, although I personally have not done this. For me I saw it as an opportunity to make some part time income, to help people and to learn new skills. As a Primerica representative we get all of our licenses and we basically own our own business. So for each person you meet they run their business as they see fit. I have not harassed anyone or hounded them for lists of friends but thats me. Personally I have learned a great deal from them and I just try and help people with anything they need. We have a free financial needs analysis and from there we show you how to protect your income (ie life insurance), consolidate debt (if you need or want it) and save for retirement with our mutual funds.

That was the impression that I was getting too….ITS ALL ABOUT THE INSURANCE. A guy came around where I work and a wanted to talk to people about financial planning. So I met with him and what he said sounded good, but it sounded too good so I wanted to check it out before I got involved. Hes not trying to recruit me to sell but trying to “help” with financial planning. So far everything I am reading doesn’t sound so great. Sounds like I’m better off doing what I have been doing…cutting back spending and working more.

Friends of mine lost lots of money when Primerica merged was taken over by Citibank. Some of the Primerica reps went out of business and could not be found by their customers.

Your kids would inherit your card balances

I dont know but I dont think your kids would inherit your card balances. I dont know. If you are worried about that – depending on the balances you carry maybe you should take the credit insurance they usually offer- it costs according to the balance you have but if you die they supposedly pay the balance off. I never go that route but instead have a life insurance policy and one on my DH.

Its worth the money to us to pay a monthly premium for some coverage that would take care of the balances and final expenses among other things etc. should something happen. There are ways to make sure your kids wont incur your debts and yet will be able to make your final arrangements if you have’nt done so already.

Talk to family members, an attorney, maybe a financial planner or adviser. I dont have any real advice but instead of worrying about having a credit card available to you to use in an emergency.. why not concentrate on an emergency fund or actual cash that you can rely on in an emergency? Work toward that and save the credit card as a very LAST resort. Let me see if I can offer some clarity and a suggestion.

As for leaving credit card balances to kids. That doesnt happen. Your accounts are your accounts. Your children have no legal responsibility to your outstanding debts it you die. The only way they would be resonsible, would be if they were listed on the accounts as joint account holder. Your estate, if there is one, would be responsible. If there were not enough funds available, then the creditors miss out. There is nothing else they can do. I hope that helps.

As for the credit counselors, I’m not a big fan. I have seen what they do to people and it isnt good. Keep the Discover account for the emergencies. I have 3 kids. I understand that. The others, you can settle each 1 as time goes on.

As for creditors sueing you, depends on where you live. And whether you are worth the legal endeavour. IF they dont think there is a chance to recover their money, they wont sue you. Hope that helps.

Consumer Counseling vs Credit Settlement

I am new to this blog and really appreciate all the advice and support you all offer. I live in Oregon and am trying to pull myself together financially after a miserable divorce where I lost everything. I had to single parent four nearly grown kids, had to put alot on credit cards because I didn’t have enough income to take care of my expenses. As a result, $20,000 debt on three Visas, all Chase.

I have spoken to Consumer Credit Counselors as well as someone from Superior Debt. The first group said they’d negotiate down the interest rates and with a four year plan, I could be paid off. That sounds good to me, but what scares me is that I can’t keep a card out for emergencies. I have a Discover Card that I rarely use and it has no balance on it. With four kids, I feel I need to have a card available because who knows what can happen over four years.

The Superior Debt folks said I could keep that card out, and that they’d do that debt settlement with Chase. They suggested I could be debt free in two years. But I don’t want to get sued!! I suppose either way my credit (not that its all that good now) will be in the toilet but is one better than the other?

And my third choice is to keep making payments. But of course I’m just doing minimum payments. How much more over minimum is necessary to make a difference? I would hate to die and leave the balances to my kids.

Also paying college loans for the kids, car payments… the list goes on. All suggestions very welcome!

credit settlementLet’s start with the last comment, about leaving the debt to your kids. You do understand that your estate stands for your debt and that no one can be forced to take on your debt. Meaning, whatever assets you have (house, car, savings, checking, investments, etc.) goes to pay off the debt, not life insurance unless you so designate it. If there is insufficient assets to pay the debt, then your estate is partial or completely insolvent and the creditors get partial or nothing – depends on your state laws.

Now, about the debt. Your best plan is to get $1,000 in the bank as an emergency fund and NOT USE CREDIT CARDS FOR EMERGENCIES.

Then, make minimum payments to all credit except the smallest balance, make as large of a payment you can until it is paid off. Even better, if you can make a minimum payment on time, and then start paying at least half the bill every 2 weeks, you will clear that one up quickly. Then start on the next one.

If your kids are near grown, encourage them to get a job and start helping support themselves. I gave each of my sons limited time to get a job once they turned 16 and then they had to pay their portion of the car insurance, their own gas, their own social life etc. If I only had $25 for shoes and they wanted the $50 pair, I did not spring the difference.

Was that mean, maybe. But I now have 2 grown sons who can stand on their own 2 feet and not come running back to mommy & daddy when they over spend. CCCS was good to us.
You really are not supporting the kids if you are relying on a credit card for safety…. I know it is scary… but work really super hard at putting away $1000 in the bank somewhere, forget it is there, and shred all the cards. Your “credit card for emergencies” is then your bank account….

Life is way better that way – trust me!!! Been there….

Unifund Phony Fresno attorneys.

They attorneys sued me after I sent Unifund a verification of debt letter to which I NEVER received a response. They won cause I did not receive the summons.

The “Unifraud company” is a consolidator and creates debts out of thin air. I checked with California attorney general after I went to visit a company in San Jose, CA. Shortly after that I had two cards for each of the ones mentioned to the company. I NEVER signed any papers nor did I tell them more than I had card x, card y……..

BTW The clock is clicking on the Fresno attorneys and time will soon be up. With the current financial “crash” let’s hit all of them with multiple demands for confirmation of debt. AND if you have very low income go to your local court and ask to receive fee free legal filings.

Surely they had to show the courts some verification that they served you with the summons? Signed paper by a process server, or registered mail receipt that you had signed?

Help for single moms

Does anyone know if there are any organizations available to help single moms while they are in school for temporary assistance (besides K-tap)

My daughter is trying to get through school and has 6 months to go. Her student loan money is late and she is chewing her nails trying to save her house. She doesn’t want to move, because of taking her son out of his school. She does not want to lose her home. She only has 6 months left to get through school.

This seems like a good bet for negotiating with the mortgage company, as long as she hasn’t missed a lot of payments already. If she knows the loan money is coming, I see no reason she should have to lose the house (but of course, I’m not at the mortgage company!)

Also, some schools have “emergency loan” programs through financial aid to at least get her some gas/food money, which would help temporarily.

Tell her to hang in there and make friends at the financial aid office – depending on the school, they’ll sometimes have some sympathy and work with her. One of my students would always manage to get his loan check early, because his financial aid advisor would watch out for it and call as soon as it came in.

Good luck!