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But I Gave The Car Back Voluntarily

“But I Gave The Car back Voluntarily!”

“I don’t even have the car any more!”

This was the line of reasoning I was receiving from a client that I was working with.

She had an auto and she had gotten behind on payments. When the bank was threatening to repossess the vehicle if she did not start getting caught up on the payments, she voluntarily gave the car to them.

I was discussing with her some ideas and options to trying to get the account settled and maybe deleted.

The challenge here though, was that she didn’t think she should have to pay the debt, since she gave the car back to the bank.

“I understand you feel that way.” I said. “But lets look at it another way. Suppose I borrow $1000 from you, to buy a really cool plaque with a rubber talking fish on it that sings when activated. After buying it, I use it in my “Man Cave” and all my friends love it.”                            images.jpeg

 

“Now a few months have gone by and I have not paid you back yet. So you get a little frustrated and threaten to take the plaque if I don’t start making payments as agreed. Do you really want the plaque? Or do you want your money?”

 

“The money.” She responded. “ I wouldn’t want the silly fish thing!”

 

“Okay.” I said. “So lets say I give it to you voluntarily. Does that change anything?”

 

“No.” She said.

 

“Now lets say you have it sitting on your garage and someone sees it and offers to buy it from you cheap. If you sell it, for say $100, would you call it even and I would not owe you any more money?” I asked.

 

“Not a chance!” she demanded. “You borrowed $1000, you still owe me $900!”

 

“Exactly,” I replied “that is why the bank says you still owe them. They sold the car at auction and got some back, added the fees they had to pay on top and now, even though you don’t have the car, you still owe them the money.”

 

I went on to tell her that the remaining balance is not the only thing to consider either. A repossession, voluntary or not, is a huge negative on your credit. It will commonly get in the way of you getting a mortgage for 2-3 years, as well as drop your score as much as 100 points.

 

If there is any way of avoiding a repossession (short of breaking the law), you want to try it.

Feel free to let me know if you have questions or comments and I hope you have a wonderfully blessed day!

 

 

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