Lets play a game...Lets settle this debt!

[dscurlock]

The game is called lets settle this car debt or
come repo the car....

I got this 2006 Aveo for $15k - and just 3 months
later - I found the same car for $9,900 ..

I owe $7500 on the car that seems to be wearing
out quite fast these days, and the rough MN weather
surely does not help the cause...

Do you guys think the CitiAuto would play this game?

They have a couple options:

a: They can offer to settle the debt for less then
what is left owed on the debt.

b: They can come repo the vehicle, and turn around
and sell it probably for the same amount they could
have settled with us...

What do you guys think...

[justbroke]

Car lender don't seem to care about getting auction prices. I actually think that they must stand firm or everyone will try to force them to take Fair Market Value as soon as everyone drives a car off the lot and 3 months later (just an example) decide they paid too much.

(Creditor's) First rule of debt settlement... don't settle if they're paying on-time and their credit is good!

[dscurlock]

Car lender don't seem to care about getting auction prices. I actually think that they must stand firm or everyone will try to force them to take Fair Market Value as soon as everyone drives a car off the lot and 3 months later (just an example) decide they paid too much.

(Creditor's) First rule of debt settlement... don't settle if they're paying on-time and their credit is good!

well thats one problem..everyone does not stand firm..so compaines
do drive you in the direction they want to force you to go...

true..but I did not just drive this car off the lot, and think I
just overpaid for it..this is a 2006...and your right, as long
as you have a contract and up-to-date, I have never had
anyone say yes, lets work out a new plan...its not until it
is well into default, if they want to talk, then that is when
it will happen...

we could either work out a settlement... or they could
come get the car, and maybe even get a less of a deal
when they repo the car, and send it to auction...

So are you saying that no one on this forum was ever in default
on a car loan, and no car company ever made a settle vs repo'ing the car?

I am just trying to offer a settlement solution compared to the hassle
of repo, then auction it off, etc..I could just as easily say
crap on them, take the car, as I have two other fully
running vehicles that I got from craigslist...

I will never, ever buy a new car again...

PS..i may be ontime for the moment, but credit is far from good...
I would just like to anticipate if the car company would be open
to settlement if i let the car go into default...they could very
well say no, we are coming for the car...I just do not know what
they are or are not open too...

[justbroke]

So are you saying that no one on this forum was ever in default on a car loan, and no car company ever made a settle vs repo'ing the car?

I'm saying two things. First, no major car creditor that I know has ever made a settlement on a current debt. Second, most major car creditors would rather repossess your car in Bankruptcy than do a ride through (Ford, GMAC, Honda).

I think this is more about leverage than anything. The reason I say so, is that even in Bankruptcy, lenders would rather foreclose upon the collateral than to make deals. So much so, that the process to actually Redeem property in a Chapter 7 bankruptcy case, requires the debtor to file a Motion with the Court and hope that the creditor doesn't oppose it!

It's adversarial in nature and I see why they larger creditors (like Ford Motor Credit) take the stern position, just to send a message to others. (That's the only reason that they really have.)

I think I can safely say that I have never heard of an automobile company willing to not repossess a car if you "settle" with them. They'd rather take the car to auction. I think only a Bankruptcy would put them in a worse position where they are more akin to negotiate or allow a Redemption.

But that's just me talking based on what I know. It may not be the law of the land, and your particular creditor may be more flexible.

[dscurlock]

that sounds like a fair assesment.. after all, if they did settlements, then
everyone would be giving up their cars I guess...I guess the only settlement
I can foresee is when the car is repo'd, then they figure out what I owe
them, then they would likely work on a settlement on what is owed
(after the car is gone

[justbroke]

Perhaps just go to the auction and buy it back. In any event, you'll still be paying the FMV of the vehicle and the deficiency (unless you're filing Bankruptcy).

[dscurlock]

Perhaps just go to the auction and buy it back. In any event, you'll still be paying the FMV of the vehicle and the deficiency (unless you're filing Bankruptcy).

FMV? never...for one, they will sell it at
auction for about $4/5k then bill me the difference (deficiency)
of the remaining loan...they have to use those proceeds to
pay off what can be paid off, then give me the deficiency...
some time down the road on the deficiency, then they
would most likely be willing to settle....

So I am not sure what you are really talking about
"paying the FMV of the vehicle and the deficiency"

in the meantime, I am saving a small bundle, payments, interest,
new tires, new rim, other small repairs, etc...

[justbroke]

FMV of the vehicle at an auction. At an auction there is a "fair market value" -- sometimes known as the wholesale value -- that someone is wiling to pay for it. My statement was that regardless of what is derived from the sale, the deficiency will bring you right back to what you owed.

[dscurlock]

FMV of the vehicle at an auction. At an auction there is a "fair market value" -- sometimes known as the wholesale value -- that someone is wiling to pay for it. My statement was that regardless of what is derived from the sale, the deficiency will bring you right back to what you owed.

how do you figure that?

If I owe $8,000 on the car, and it sells for $4,000+ at auction...
the bank will apply that $4,000 on the loan. The Deficiency
would be $4,000

so how do you figure it will bring me back to owing $8,000?

unless you think the bank gets to repo the car, sale the
car, keep the sale money, and not apply the proceeds
to the loan...

They have to sell the car at the fair market wholesale
price, not for what they think they can get for it, then
the proceeds from the sale will be applied to the loan...

I would get a letter something like this:

Your car was sold at auction for $x amount, and $x amount
was applied to your loan, leaving you the defi balance.

heck, if I thought i just could go in and say, this is
what I think it is worth, people would laugh at me...

What I am concerned about is the honesty of what the
car really sold for, and what they leave me with...

They have to start the auction off at fair wholesale market value..
they just can not start off with saying something like: 2006 Aveo $500 -
Otherwise $500 would be no where near fair market value...

[justbroke]

Please be aware that I don't think you shouldn't try. I would still try what you suggest. The appetite for a creditor settling over repossessing seems to be improving.

As for math, I think you did it right, but don't seem to agree with me.

Loan Balance $8K. Sold at auction for $4K. Deficiency $4K. You're billed for $4K. What I'm saying is that they still get what it's worth by selling the collateral and collecting the difference from you.

[dscurlock]

Please be aware that I don't think you shouldn't try. I would still try what you suggest. The appetite for a creditor settling over repossessing seems to be improving.

As for math, I think you did it right, but don't seem to agree with me.

Loan Balance $8K. Sold at auction for $4K. Deficiency $4K. You're billed for $4K. What I'm saying is that they still get what it's worth by selling the collateral and collecting the difference from you.

The bank would collect by selling the vehicle at auction...

now I have not had a repo in sometime, and unless the laws have
changed, then the bank would repo the car, sell the car at
auction, lets say $4-5k, then they would bill me the balance,
maybe plus any repo fees and such, etc..thats it...

the bank does get the proceeds from the auction sale, but they
have to apply those funds to the loan...

when I did have a repo in the past, this is how it did work...

Owed: $13,000 on car

Bank sold car for: $8,000

Consumer Balance: $5,000

plus/minus some fees...they never really tried to
come after this, never was sued or anything...

however, these are different days, you never know
what is going to happen next....

Like you said, it does not hurt to try...if they want to make a deal, then
fine, if not, no problem, come get the car, I hope it sells for alot..
the more it sells for, then the less I will owe....but you are right, I see
no reason why they would make a deal..when they can just sale the
car at auction, then attempt to come after the balance...

all i ask for is proof of how much it sold at wholesale...

by all means, any of those that have had a repo..
let me know if this is right...your car would have been
repo'd, you would have gotten a letter on when the car
is to be sold, then you get a letter of the amount the
car was sold for, then how much you are left with...