Sounds like she is in a hole far deeper than “get me past January.” Unemployed and broke, she’s gonna have to make a lot of changes. It will be a long, difficult process, but she might as well get started by giving up the car.
No, you aren’t an asshole. But I’m not a huge fan of a lot of what I see in terms of “I fucked up - GoFundMe”-type begging. Be her friend - not her bank.
I tried about 3 times to write something relevant, and cancelled each in turn.
And now I see @Dinsdale has nailed it just above. The obligations we owe our friends are limited. If you were willing to make her your dependent for however long it took that’d be different. But if not: not. You owe her your goodwill and your good advice. And little else.
The USA has a dozen million tragedies just like this. This person happens to be the one drop in that ginormous bucket you know individually.
Advice that saves her from throwing her’s and others’ good money after bad is worth far more than the dollars you personally could afford to contribute. Just like speaking truth to power is often painful and seldom rewarded, speaking truth to tough situations is often equally unrewarding. But equally necessary. Both for her possible benefit and for your conscience.
She may be playing her cards nearly optimally. Or she may not. But your leverage, however large or small it may be, is in how she plays those cards. Not in sticking another $X in her hand to buy another card to misplay.
Good luck and keep us posted.
^ This. I was on the board of a small credit union for two years. What the CU wanted was their money, and they’d rather have it late than not at all. A repo’d car sold at auction would not recoup all the money lent by the CU. An negotiated and extended payment plan could.
However, it is BEST if she goes to them FIRST, as soon as possible in this situation.
Especially if a lot of other people are in the same situation with this lender, they’ll want to keep as many people still paying as possible. Well, they should - not all lenders are willing to negotiate, but many are. She really should try this.
If she gives up the car how is she supposed to get to a job?
Because that’s the reality in the US - if you don’t have transportation you don’t have a job. And outside of a handful of urban areas, if you don’t have a car you don’t have transportation.
What you’re saying is that this woman is going to continue to be unemployed and will eventually be homeless, especially if she’s also not paying rent. Because that’s often what happens in these situations.
I’ve known people who lived in their cars who managed to keep jobs and crawl back out of the hole. I’ve never known someone who gave up the car being able to keep either job or home if they live outside places that have actual mass transit, which are only a very few places in the US.
It’s a sad fact that she’s actually better off keeping the car and giving up her apartment; whatever money she has coming in to pay rent would probably allow her to make car payments, plus some. If she can promise to make the payment each month, plus and extra $50 until she’s caught up, she might be all right, especially if she has a few hundred to give them so the arrears isn’t 10 months, but maybe 6 months.
Some financial institutions have a rule that they will work with you if your arrears are less than n months. If they are more than n months, though, they must charge off the loan and repo, no negotiations permitted. I had a friend get in arrears on a loan after a bad leg fracture, and using up short term disability (which wasn’t enough in the first place). The place that had the loan on his car had a rule that if you were 90 days in arrears, they would negotiate, but 120 days, and they would not. He was 124 days when he started back at work. I lent him the money to make one payment, so he could get to the 90 day mark.
But he was at the point where he was talking about taking what money he had left in the bank, which would cover another month’s rent (he was already eating at the community kitchen and going to the free food pantry), and using it for the car, and hoping he didn’t get evicted-- his landlord was pretty hardassed. However, he was calculating that he could sleep in his car for a month, and sneak into the college gym to shower, then look for a new place.
At that point, I said he could sleep in my living room on the futon, but what would he rather do? have me lend him a month’s car payment, or sleep on my futon? He said he’d rather borrow a month’s car payment, if I was really OK with it.
He paid back every cent.
But I expected that. He was a responsible person, good with his money before that leg fracture. It was really just a terrible misfortune that dragged him down, but with help, he could get back up.
@Little_Nemo: do you know what she was like with her finances before COVID? Was she responsible, not in heavy debt, with a good credit rating? or were things really not that different before the pandemic? I think you need that information before you make a decision.
Simply not true. It may or may not be the case for the OP’s friend, but we don’t know that, and it’s certainly false as a blanket statement. I work with folks who ride the bus to work every day.
mmm
A job I once had the summer after college was with a car finance company. It’s been decades since then ( and for all I know it may be illegal now) but car companies back then would offer extensions on payments because they could calculate and charge interest on the balance the whole time and add it onto the back end of the loan. In effect, that 10 month break makes the loan much more profitable to the finance company.
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Now, about what to do… jobs along the mass transit routes? If they send her account out for repo, one of two things will happen. She’ll either have to hide/store the car someplace the wrecker can’t get at it ( and those guys are Very good at their jobs) or it will get taken, possibly when she’s out someplace where she’d be left stranded. That car is useless/gone to her either way.
Advise her to take all of her personal belongings out of it & let them take it. She might scrape up enough money to get a “$500 Beater Car” or she might qualify for some charities near her that have a car donation program. She needs to act quickly either way.
Yeah. I didn’t see it described where she lives. Plenty of people walk/bike/bus/carpool to work. If she lives in the boonies or wants a particular job, maybe those are also luxuries she can no longer expect. Getting a job near her or moving where transportation is better are better options than expecting her friends to subsidize her.
She’s not irresponsible with her money. But I believe she was somebody who lived paycheck to paycheck. She has some pretty serious health conditions and that has sucked away a lot of whatever extra money she has ever had. It’s also made it difficult for her to maintain a steady employment history.
Health problems are what caused her current financial crisis. She’s been hospitalized since October. She almost immediately lost her job and has no income. So for the last couple of months, she’s been living on what she can scrape together from savings, selling possessions, help from family and friends (like me), and public assistance.
A lot of companies that do car loans like repossessing cars juuuust fine. Some cars get sold 5 times and they make money.
I wasn’t questioning the profitability for the company, rather how such an arrangement would ever help someone in that situation.
And you would be 100% right. That is a balloon payment and balloon payments only help the “bank”. I’ll even go you one further: The only ‘good’ people that you’ll find working at finance companies are people who were desperate for a job and badly in need of money that they took a job there. Those companies exist only for profit and extending their bottom line through the flesh/blood/misery of their desperate customers. The people who run them revel in the abject human misery which they can wreak on their fellow man. Throwing back their heads and laughing at the reports of a car being repossessed is just what managers there do.
While I was there ( and I got out as fast as I could ) there was only One customer who made those blood suckers gnash their teeth. He bought a Porsche ( or was it a Jag?) on terms. His payments lapsed, his phones disconnected, and the flat bed never could find the car. His employer said he left the firm. His credit cards didn’t show a forwarding address for a very long time.
Evidently, he had dual citizenship with the UK. He accepted a job over there, packed up his house ( sold it) and had everything shipped to the UK. The Porsche ( or Jag) was driven into a container at Port Newark and shipped to the UK. So. No Repo, no repayment, and US suits couldn’t touch his UK assets. Looking back, all I could think was, “Well played.”
Unless he ever wants to come back and own things here.
Well, ‘ever’ is a very, very long time… and he bought a house in the UK and started a new job (and a new life) there. Someday he might change companies, but I’m sure if he did come back he’d be smart enough to sell the car in Europe as well as wait long enough for the charge-off to drop off of his credit report. It’s been decades, so I don’t know if it’s still 10 years that charge-offs show on your credit report; maybe its 20 years now.
Maybe I missed it, but has it been said how much she is trying to raise? And how does she intend to continue making payments for the car after this campaign is over?
Regardless, it’s best to at least ask - because you’re no worse off asking and getting a “no” than if you didn’t ask at all. And this year, especially, financial institutions are more likely to be lenient (not guaranteed - some people are just inflexible).
We don’t have buses where I live. Did you miss my point about mass transit? MOST of the United States does not have it. If you don’t have a car where I live you are very, very unlikely to get a job.
If you have buses where you are, good for you! But that doesn’t change how crap it is where buses don’t exist.
Where the hell do you get a “$500 Beater” these days? You need at least $1500 for something that will run badly around here.
Sure, we don’t know all the details, but where I live I’d be better off keeping a car and losing my apartment than the other way around because without a car I would simply have no way to get to work and earn money.
Well, I suppose I could live in my sister’s basement, but she’s 500 miles away which would be… inconvenient.
Of course then you’d have ignorant people saying “Where do they get off living in a homeless shelter when they own a car? If they have enough money for a car, they should move out of the shelter and give the space to somebody who really needs it.”
Some people don’t understand how poverty means you have to make impossible choices. Pay the rent or make a car payment? Buy food or buy medicine? Pay your overdue electric bill or your overdue gas bill? Just because you can do one thing doesn’t mean you have enough money for your basic needs.
@Little_Nemo: Where do you live, and can this woman drive stick? I might know about a car that could be borrowed, or that might be that $500 beater she’s looking for.
Oh, and yeah, FWIW, those beaters do exist, but you really have to luck into one. I had a car that my cousin gave to me, because he was moving to a state where there was no way it would pass the strict emissions tests, and Indiana has no emissions tests.
It was already about 16 years old, and I drove it for about 7 years. I put a new clutch, brake lines, and some other things into it, but a lot of that kind of work I can do myself.
Still, when it was 22 years old, it needed a lot of things, including, I suspected, a caliper, and definitely a new fan for the climate control system. It burned oil, and I was going to junk it (I’d just inherited money, and bought a brand new car outright), but this guy who’d just moved into my building, and was trying to get his life back together after court-enforced rehab, and then a few months in the county jail, and another couple months in a halfway house. He needed a car to get a job, and had almost no money asked me if I wanted to sell it.
So I sold it to him for $250. I also sold him my son’s old computer for $100. I didn’t really need to money, and the computer was actually worth more than that, but I knew it would help him with his job search, and if he was eligible for any unemployment or EBT he could apply over the internet.
He had a little money because he got some kind of vet benefits. It wasn’t enough to live on, but I guess it had accumulated while he had been a guest of the state.
I actually thought about just giving him the stuff, because I momentarily had money, but it was a one-time thing, and he had offered, I hadn’t asked. Plus, the computer was actually worth about $650, along with the monitor and everything, and I put all the money in my son’s savings account.
I was totally upfront about all the car’s problems, and apparently he knew how to do some of the work himself, like the caliper. That was the only thing it needed that was dangerous. The AC worked on it, because the first summer I’d had it, it was 105°F for a week, and it didn’t work, so I paid $700 to retrofit it with an AC system that was legal, since the one it had used chemicals that were now illegal.
I saw him one more time, and he’d gotten a job doing prep cooking, bussing tables, and dishwashing, and qualified for EBT benefits, so it was coming together for him.
Of course, this was years ago. I don’t know if he kept it together, or relapsed, or what the pandemic did to him.
But the cars are out there. I had told him to drive the car into the ground, and if he were lucky, it might run another year without needing a major repair (the timing belt had been done), and then he might be able to afford a better one. I hope that came true.
My friend lives in Rochester, NY. I don’t know if she can drive a stick.