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James Mather
James Mather,
Category: Law
Satisfied Customers: 22624
Experience:  Senior Partner at Berkson Wallace
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Hi. I would like advice on how to deal with a financial situation

Customer Question

Hi. I would like advice on how to deal with a financial situation with a car on finance.

My husband and I have both found ourselves out of work meaning we can not afford to pay the finance on our car any longer as the mortgage etc is more important.

We have been told that even if we return the car immediately we will still have to pay off another 5k to bring payments to 50% of original loan amount. This is just not possible as we have no money coming in at all and even when my husband starts his new job it will barely cover our essentials so how can we be expected to pay it.

Is there another option even if it means our credit rating dips, we are desperate to get rid of it under these unfortunate circumstances and worried sick.
Submitted: 4 years ago.
Category: Law
Expert:  James Mather replied 4 years ago.

How much is the car worth if sold?

How mcuh is outstanding?

Customer: replied 4 years ago.

Original finance was 14k, have paid 2k in repayments and now we owe 12k and the car is now valued at 9-9.5k

Expert:  James Mather replied 4 years ago.






You can try to sell the car
yourself through the likes of we buy any car.com and they will agree to pay the
finance off . Although you will be required to find the shortfall immediately
before the car is sold. It cannot be sold unless the finance is paid for in
full. It appears that you do not have the money to pay the shortfall, so if
that is not an option.



You can hand the car back to
the finance company and it will be sold at auction and you will get less than
your estimated 9000.



The finance company will then
look to you for the balance, which will obviously affect your credit rating
because it will be registered as a default and if they take you to court, they
will get a judgement.



I'm sorry to have to tell you
that there is no magic solution to get you out of this finance shortfall. If
there was, everyone would do it. The situation that you are in is not at all
uncommon.



It might be worthwhile, in
view of any other potential problems, in addition to this one, contacting an
insolvency practitioner at this early stage.



I appreciate that this is not
the answer you wanted but there is no point in me misleading you. There is
simply no magic solution to what you are looking to do. I think you probably
thought that already.



Can I help further?





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Customer: replied 4 years ago.

Are we able to negotiate a repayment amount for the amount owed as essentially we cant afford the current £271 per month, we need to realistically bring that down to as close to £100 as possible?!

Expert:  James Mather replied 4 years ago.

It comes down to negotiating with the lender.They may be more amenable to negotiate on condition car is returned.