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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41220
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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Hello I need some information if possible. My car payment

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Hello I need some information if possible. My car payment is 689.00 a month and I am strapped right now make the payments. What can I do legally to get out of this car. I am upside down on it big time. I didn' know if I could purchase one that was smaller in payments and let this one go back or volunterally turn it back to the bank. I just don't know. The bank will not work with me on lowering my payments. My credit isn't good.

Thank you for your question, Kathi. Please permit me to assist you this afternoon.

Are you seeking your legal options or your financial options, or both? I ask to esnsure that the answer I will provide is exactly based on your expectations and requirements. Please advise.
Customer: replied 3 years ago.



I would be happy to provide some options, just please be advised that I do not know your specific situation and can provide general information. Some information may likewise not be favorable to you so please do not blame the proverbial messenger if that is the case.

A few questions, if I may. Is it possible for you to obtain co-signers? What is the current balance owed for this vehicle? When did you make the initial contract?
Customer: replied 3 years ago.

Yes I can get a co signer but If purchasing a new car they said I don't need one. The balance on he car is 31,300.00. May 2012


These are are some options for you to consider.

1. From a purely legal perspective, returning the vehicle DOES NOT invalidate the loan. The lender, even if they accept the vehicle, can still hold you liable for the remaining debt. For example if they take this car back, put it on auction, and sell it for $25,000, you would be personally responsible for the difference between the value they sold it for, and your outstanding balance pus auction fees, fines, and penalties for defaulting on the vehicle. There is a myth that by returning the car, it absolves you from the agreement--that is not the case. You can still be held liable and pursued for the difference. This is only a viable option if the lender agrees in writing that before you return the vehicle, the lender will consider the debt paid in full and will not pursue you for any deficiency that may be owed to them for the vehicle.

2. If the dealer is willing to 'buy back' your car and offer a different deal for a more affordable vehicle, that may be a viable option. Please also be aware of the issue above, that if they offer you less for the car than you owe, you remain responsible for the difference. Many dealers add this value to the backend of your purchase, so a car can then become far more expensive if you purchase it.

3. You may also want to consider speaking to local credit unions in your area. They tend to be far more liberal with their lending, and they may be able to provide you with the means of refinancing your loan for a lower fee. Some credit unions offer very low interest rates on used car loans if the car is still relatively new (I have seen loans as low at 1.99% APR, and personally took advantage of such an option with one credit union), which can lower your payments if you transfer the loan elsewhere.

Hope that helps.

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