No magic can bail out delinquent driver
Dear Terry,
I purchased a Honda Element in May 2007, when I had a great-paying job. I have lost that job due to having to move because of domestic abuse. I am living in a small town with two boys and I am having a very hard time finding a job.
In short, I can no longer afford my car. My monthly payment is $495. My mother signed on the loan with me and I have ruined her credit now due to the fact that I have fallen behind on my payments.
How do I get out of my loan and still save my mother’s credit? I truly cannot afford a $500 car payment. I still owe $22,000, yet my Blue Book value is only $14,500. Please, can you give me any advice?
— Jami
Dear Jami,
I wish I could offer you and others in similar situations some magic way to get out of a car loan with no financial damage. Unfortunately, there’s little that can be done.
Unless your mother can take over making the payments until you get back on your feet, the lender is likely to repossess the car, which will hurt yours and your mom’s credit ratings.
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