What are the options for someone who has purchased a car they can no longer afford?

A friend from school is in a pickle. She bought herself a 2015 Honda Civic in December of 2014. I guess her payments are $560/ month. She lost her job, and can no longer afford the payments. What are her options? Tuesday, she went to a dealership to see if they could do anything to help, but they turned her away. She isn't eligible to refinance the car until after a year (December), and she can't hang on that long. If she voluntarily relinquishes the vehicle (repossess), is she still responsible for the debt? She knows that bankruptcy is an option, but obviously, this is a last resort. Any help or advice is appreciated.

< is she still responsible for the debt? >

Yes, they will sell it at auction for what they can get and then come after her for any balance as well as the costs they've incurred having to repo and sell the vehicle.

She has to accept that her credit is going to take a huge hit on this no matter what she does. She can do a voluntary repossession, where she goes and turns the car in on her own. This will still reflect as a repossession on her credit report, and she will have to pay the difference between the balance of her loan and what they are able to auction the car for. She can stop making payments and wait for them to come and take the car away. This is considered an involuntary repossession, and comes with a higher cost than a voluntary repossession because of the additional repossession costs she'll get hit with.

It may be possible for her to find a buyer for the car and still be able to sell it even though she doesn't hold the title. This is not an easy process, and she'll have to find a buyer who will be okay with it, because her bank or finance company has to be involved.

Your best choice is to offer it yourself or give the auto to your mother to pay for since she is generally as obligated as you seem to be. In the event that you exchange for a less expensive auto you will get a higher interest rate and a shorter term advance in addition to pay deals duty/title charges a second time, that is a shocking arrangement! It seems like you aren't working and have no pay, so time to show at least a bit of kindness to heart with your co-underwriter who ought to have referred to this when she marked as your co-borrower. Offering the auto by and large presumably isn't an alternative unless you can pay the bank the contrast between the deal cost and the advance amount… Trying to get another person to assume control over a credit is exceptionally troublesome.

Even if she voluntarily relinquishes the vehicle (repossess), she is still responsible for most of the debt. The company will attempt to sell the vehicle and credit her for whatever they get by selling it, minus the costs of the sale (advertising, etc.), but she will be responsible for the rest.

If she's not under water on it, try to sell it. But if she is, her options are few. Allowing it to be repo'd, yes she's responsible for the balance, and the repo will how on her credit. Bankruptcy shows even worse on her credit and she still loses the car. Even if the year was up, she couldn't refi it with no job and inder water.