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 Post subject: Auto Debt...Get Rid Of It?
PostPosted: Tue Dec 10, 2013 9:21 am 

Joined: Tue Dec 10, 2013 9:05 am
Posts: 2
Hi All,

I'm a noob here but have been soaking up as much as possible. Thanks all for a great resource.

I'm hoping you guys can help me with a car finance situation.

My wife and I are both 30 and we have about 2k in credit card debt. I make 50K and she is unemployed. Because of bad decisions in my former business I have terrible credit and will probably file bankruptcy in the next 3 years. My wife has amazing credit but no income. So altogether we have very little credit.

I have an old truck thats paid off and she has a car with loan. Her payoff amount is 14K and monthly payments are $400. We can trade it in for 20K...so we should be able to pocket 6K from a trade in and reduce our expenses by $400/month.

She prompting me to look at older model cars that we can get for about 6K and seems to really want to trade her current car in and pay cash for an older one. The tradeoff is her new car is a 2007 with 50K miles and the one she wants is 2002 with 120K miles. This particular model may need a transmission in the next 70k miles and that would be another 2k out of pocket. She is starting this convo and says she would rather have the older model.

I think she wants to do this but she could definitely just be making a conscious decision to sacrifice for our family. Either way I feel lucky to have a wife willing to make that decision.

Does it make sense to trade in and pay cash for an older car with more than double the miles?

Thanks in advance for any advice....I'm trying to right my financial ship...


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Tue Dec 10, 2013 9:38 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1627
Location: Seattle, WA
Makes sense to me. It would only take 5 months to save enough in car payments, to pay for that transmission.


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Tue Dec 10, 2013 9:54 am 

Joined: Mon Nov 01, 2010 5:15 pm
Posts: 1201
I'd agree with that plan as well. Just be careful & don't let the extra $400/month be piddled away.


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Tue Dec 10, 2013 11:22 am 

Joined: Tue Mar 11, 2008 12:19 pm
Posts: 1778
Location: Ottawa, Canada
Why does your wife need a vehicle at all if she's unemployed?


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Tue Dec 10, 2013 12:36 pm 

Joined: Fri Aug 17, 2012 7:07 am
Posts: 11
Why will you file for bankruptcy in 3 years?


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Thu Dec 12, 2013 8:38 am 

Joined: Tue Dec 10, 2013 9:05 am
Posts: 2
My wife does sporadic odd jobs in the community. Babysitting, errands, groceries shopping, etc. so we need to keep her mobile while I'm at work.

Due to the circumstances of my situation my lawyers are telling me I need to wait until everything shakes out before I pull the trigger with the BK. My best guess on when that is is 3 years.

There's also an update on the situation...so she eclipsed 50K miles and now Carmax...which has given us far and away the best trade in value...is offering 2K less than they were 3 weeks ago. That means we would have to come out of pocket 2k for the same vehicle and I'm not sure that makes sense. She was being a great wife to be ok with downgrading to a $6k car and I'm not sure if she'll be happy with a 4K vehicle. Also, i feel like a $4k car will have maintenance add up significantly so much savings would there really be?

As annoying as it is it may make sense to just deal with the 400/month for another 3-4 years?


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Thu Dec 12, 2013 9:55 pm 

Joined: Fri Apr 05, 2013 2:30 am
Posts: 154
I personally feel that your wife has taken a good decision. I don't think it will be a bad decision to downgrade to an older car with higher miles.

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Jerry
Forum Moderator, MortgageFit Community


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 Post subject: Re: Auto Debt...Get Rid Of It?
PostPosted: Sun Dec 15, 2013 7:37 am 

Joined: Sat Dec 10, 2011 7:25 am
Posts: 777
Quote:
Due to the circumstances of my situation my lawyers are telling me I need to wait until everything shakes out before I pull the trigger with the BK. My best guess on when that is is 3 years.


I am sorry but why would you wait 3 years to file bankruptcy? How much do you owe and what is the nature if the debt? Are you still employed by this failed business venture? Are there any business assets? I have to wonder what debt takes three years to shake out?

Other then selling your soul to the devil or financing a porn shop ..The posters here have heard many bad financial decisions - they made ride you a bit but they can and do offer some solid, useful advise. So give us the straight skinny just maybe we can help. Perhaps at least concur with you current plans......

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RayinPenn

“If you tell the truth, you don't have to remember anything.”
― Mark Twain


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