How canI change or re-negotiate the terms with the bank that owns my car?

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How canI change or re-negotiate the terms with the bank that owns my car?

I have been unemployed for a long time now, and no longer have side jobs to sustain myself. For several months I have not been able to pay many bills including my car. They said that they could help with 3 months of it, since then (2-3 months) I have yet to find work and now it seems that I owe more than $5,000 on top of what it was. I will never be able to start paying it off owing an extra $1,000 a month with incurring interest.

Asked on July 18, 2011 under Bankruptcy Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You can try to negotiate by showing the bank what you are earning, what your irreducible costs are, what your assets are, what you can afford to pay, etc., and demonstrating to the bank that you cannot pay the full amount and/or according to the current schedule. You have to try to convince the bank that ultimately it will get as much or more by working with you than by taking a hard line, forcing you into default, and foreclosing and/or suing you.

If you mean can you force the bank to negotiate or change its stance--no, you do not have that right. Any change in the terms of the loan or financing must be voluntary. Since bankruptcy may be a good option for you--and you should consult with a bankruptcy attorney to investigate it in detail--it may be that you can sue the threat of bankruptcy to gain "leverage" in your negotiations, but only do this if it is an option you are legitimately considering.


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