Should I let the bank repo the car?

WYHY writes...

"Will be filing for divorce and will have to pay child support. Cannot afford the vehicle payment, I was going to turn the vehicle in, instead of having them repo it. Wouldn't it be better to turn it in than for them to repo it? There is more owed than what the vehicle is worth, do lien holders work with you on decreasing the total amt owed? Obviously if I could afford to keep it I would, so if they have the option of suing and I don't have anything, how would they benefit? I'm wanting and trying to make/do the best thing and just need to know what to say to the lien holder when I talk to them."

Sorry to read this, WYHY, but there is hope!

I recently had a situation with someone that was in your exact same position. They had a car payment that they couldn't afford anymore because of a divorce and having to pay for child support.

This person called me and asked what he should do. I told him that he should immediately contact the lender to let them know about his situation. I can't think of any lender that would be upset to hear from a borrower who has a problem and is looking for help.

Anyway, this is what happened. He too was upside down by a few thousand dollars. The creditor gave him the option of turning the car in on a voluntary repossession, OR gave him three months to sell the car for as much as he could get for it. During the three months they offered to reduce his payment.

He took them up on the 'let's try to sell it' offer, and did sell it a few weeks later for a few thousand dollars less than what he owed.

The creditor then agreed to refinance the remaining balance for an affordable payment, and released their lien on the car.

In the end, the debtor paid of the loan balance and preserved his credit rating. The creditor was paid in full, did not have to repossess or sue for a deficiency. Everybody goes home happy!