Posted: 7/4/2007 12:39:10 PM EDT
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He traded in a '95 Jeep Wrangler and a used Lexus (not sure of year or model but he had purchased it used and was still making payments on it) on a New 2006 Jeep Rubicon. He is currently paying around $520 a month just for the Jeep. Recently his grandmother sold him her old Chrysler for $150 and he bought that to use as a daily driver to save gas for the Jeep. He also has some CC debt and is kind of in over his head. He has three years left to pay on the Jeep and between those payments and the CC debt he's in a bind. The Jeep was his offroader and it has some scrapes and dents from that. Even if he has it detailed and cleaned up really nice, I doubt he could get anywhere close to 18K or so he has left to pay on it. I know he isn't the first to be in this situation and I'd like to try to help him out (with advice, not giving him $$$). He still lives with his parents (22y/o) and does help out with bills around the house, so he's not paying rent per se. Any words of advice? |
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My advice: Sell the Jeep for what he can get for it, even if it means taking a small loan to cover the difference on what he owes on it. Buy no more toys until that loan and the credit cards are paid off. Don't get into debt like that again. I wish I could take my own advice! 
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It depends, he may get shut down by the bank if his credit is questionable (you said he had credit cards - too many of them or too high a debt to income ratio can kill him...it did for me. )
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Some consolidation services (if that's what he's thinking) won't even talk to him if he doesn't have "enough" credit card debt. I called a couple up a few years ago and they couldn't do nothing for me, since I "only" had around $5000 of debt. He's 22, if the bank shuts him down, he could try to get someone to co-sponsor (sign? whatever) a loan with him, provided he keeps his end up and doesn't wind up falling behind and dragging someone else's credit rating into the dirt. He's still living at home too, no real reason he can't work two jobs, dedicate the paycheck from one job towards paying his debt off and nothing else. |
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I appreciate your help Quintin. I might just send him this thread tonight and see what he says. The only issue about another job is the hours... he works at a factory on 12 hr shifts, 7p-7a. With those hours it might make it tough for him to get a 2nd job, but I'll probably talk to him later today. |
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Maybe he can work out some kinda deal to get some OT at his current job then? Dedicate the hours from his OT to paying his debts? I was in his boots, and still am sorta. I bought way more truck than I realistically could afford, going into the auto loan with a lot of negative equity at the time and got stupid with credit cards. Yeah, I screwed up pretty bad. I've got most everything under control now, refi'ed the truck about a year ago so my minimum payment is about $150 less than what it originally was and with a pretty decent interest rate (I still pay more than the minimum whenever I can), and worked out payment plans with my highest debt/interest credit card companies (a couple of them agreed to 7% for one year with no late/overdrawn charges, as opposed to the 29% I was paying at one time). I work on cars during the day, and on weekends I do work on the side at home that I dedicate towards paying the lowest balance credit card I have until it's paid, then I close the account, move up to the next card, and so on. My credit score is still pretty whacked and now I'm gonna be stuck for a long time in a vehicle that's already worth a lot less than what I'm paying (and losing value at a scary rate every day), but I'm keeping my head above the water. Your friend's in a bit of a rut, but it's nothing he can't claw himself out of. |