Dear Driving for Dollars,
My dad bought a car and he is upside down now. He can’t make the payments because they are so high. What can he do? His credit isn’t good enough to refinance now and I can’t pay it either, but we don’t want to have it repossessed.
I’m sorry your dad is in such a tough financial situation. Repossession is a lender’s last effort to try to recoup some of his losses when the debt isn’t paid. Because your dad owes more than the car is worth, the lender is going to take a loss if he repossesses the car. Have your dad call the lender and talk to a loan officer about the situation. The lender may be able to defer a few payments or take partial payments until your dad gets back on his feet. Or, the bank may be able to rewrite the loan for a longer term so the payments are lower if your dad needs a longer-term solution.
If you have a car question, e-mail it to us at Driving for Dollars.