[easeway]

One of my friends has come down extremely sick & needs to get out of his truck loan quickly. He is worried about selling it in the current economy. Can he call the loan company and turn it in without screwing up his credit rating? Not sure if he'll be able to return back to being an o/o after treatments in a year or not so he is very worried about the back lash of not finishing the loan. Any advice I can pass along to him?

[Rev.Vassago]

There's no such thing as "getting out from under a loan" without screwing up your credit unless you sell the asset outright.

What will happen if he relinquishes the truck is that the finance company will sell the asset at auction, likely for a fraction of its value. They will then demand payment in full for the balance of the loan. If and when he doesn't pay, they will sue him, and get a judgement against him. At that point, they have a legal right to garnish his wages.

On top of that, he is going to have a loan default on his credit report for the next 7 years.

Pretty neat, huh?

If he doesn't think he can sell the truck in the current economy, why on earth would he think that the finance company would do a better job of it?

[marcel27208]

Originally Posted by Rev.Vassago

There's no such thing as "getting out from under a loan" without screwing up your credit unless you sell the asset outright.

What will happen if he relinquishes the truck is that the finance company will sell the asset at auction, likely for a fraction of its value. They will then demand payment in full for the balance of the loan. If and when he doesn't pay, they will sue him, and get a judgement against him. At that point, they have a legal right to garnish his wages.

On top of that, he is going to have a loan default on his credit report for the next 7 years.

Pretty neat, huh?

If he doesn't think he can sell the truck in the current economy, why on earth would he think that the finance company would do a better job of it?

well before they demand full payment they will attempt to sell or auction the truck, THEN they will demand the balance left from what they sold/auctioned for vs. what was owed on truck.....there isnt a guarantee they will see and garnish wages(this does apply in certain states) alot of times companies wont come after you for balance due(not saying that wont happen)

[Rev.Vassago]

Originally Posted by marcel27208

well before they demand full payment they will attempt to sell or auction the truck, THEN they will demand the balance left from what they sold/auctioned for vs. what was owed on truck.....

That's exactly what I said.

there isnt a guarantee they will see and garnish wages(this does apply in certain states) alot of times companies wont come after you for balance due(not saying that wont happen)

In any event, they are going to hit his credit, and it is going to hurt.

[marcel27208]

Originally Posted by Rev.Vassago

That's exactly what I said.



In any event, they are going to hit his credit, and it is going to hurt.

ur right i didnt read ur reply all the way...i was halfway sleep

[Snowman7]

I have alot of experience in retail credit (autos) from my first career. Everything Rev says is true. The finance company loans money. They dont buy and sell vehicles and they dont want it, trust me. One other thing, when you are behind on a loan, dont believe a word the loan company says. All they want to do is resolve it in a way that costs them the least amount of money and they will tell you whatever you want to hear. They will tell you to voluntarily surrender the vehicle and it wont look as bad for you. Bull****. They are saving themselves repo money to come and get it. It's kinda like the cop shows on TV when they trick the suspect into a confession. Every payment you do not make is recorded as late and is killing your credit rating. And it will still show as a repo. THE ONLY THING that works is making every payment on time, like you agreed to do when you signed it, and paying them off in full. That means YOU have to find a buyer. They dont care about your personal hardship.

[GMAN]

Perhaps your friend could find someone who would take over his payments. He could set it up like a lease purchase where the buyer or lessee would pay him the payments and then he would turn around and pay the lender. There is some risk involved but it may be an answer with the current economy. He would need to make sure to check the guy out and make sure insurance is paid up to protect himself. Most lenders will not allow someone to simply take over payments. They want to make a new loan. That may be difficult with the current tight money market. If he cannot sell the truck out right it may be a way for him to salvage his credit. If he is currently leased to a carrier he could continue the lease where all money comes to him first. He takes the truck payment out of each settlement and any expenses and then gives the balance to the driver. That would take some of the risk out of the equation.

[easeway]

thanks for the info. He has to start his treatments in a month for several months. I'll pass this on.

[boneebone]

Well with alot of drivers looking for a job, why doesn't he just keep the truck leased to the company and hire a driver to drive the truck. Doesn't matter who drives the truck, as long as it's making money. He will save his credit, and make money until he finds a buyer.

[easeway]

I believe this is the route he will be taking. That is what I originally suggested to him the other day. He just wanted to check & make sure there were no other options to get around the predicament his health suddenly put him in. He knew there wasn't but never hurts to hope a solution is possible. Guess that should be a big eye opener for many of us, even if things are working out for you today as an o/o tomorrow you could be diagnosed with a possible career ending health problem. Be thankful for everyday you are given.