My ex girl friend and I had a car loan in both of our names. We split up about a year ago. She kept the car after we split and was making payments on it until a couple months ago. I found out that the car no longer runs since the motor was damaged and she quit making payments on it and can't be reached. The bank is now calling me for the payments. There is a balance of $4000 left on the car and it would require major repair costs. What options do I have since I can't afford the additional payments and am unemployed and going to school?
1 Answer from Attorneys
You do not indicate who is on the title to the car. The problem is that you are on the loan. Obligating yourself to a debt or joint ownership of property with someone else is a BAD idea as you have now learned.
If you are on the title to the car jointly with your ex-girlfriend, see if you can get her to convey her share of the car to you. You will have to keep paying on the car. However, once the car is paid off you can then sell it or do what you want with it.
If you are not on the car title, you are still on the loan. The lender probably has no interest in repossessing the car if it does not run if they have not done so already. In such case, I would make the best of a bad situation and see if the lender will accept something less than $4000 if you pay in a lump sum. Only do this if you have the funds to do so. If you want to make payments, doubtful that the lender will settle and will want the full sum.
You need to pay some way - either in full or by way of settlement if you want to protect your credit. Otherwise, if you have a lot of dischargeable debts, you might want to consider just filing bankruptcy.
If this is your only debt and if you don't have the funds to resolve in a lump sum right now, you either start paying to protect your credit and pay until the car is paid off or you let your credit be toast (which will happen soon if not already since the loan is in default) and start saving up. Hope like heck that you don't get sued before you have enough to settle the debt.
If you pay more than your fair share of the car, you could sue your girlfriend to recover 1/2 of what you paid. However, this may be more of a problem than its worth. You would have to locate her and see if she has assets. If she doesn't, then suing her will not much help you get reimbursed.