Stupid Questions

[toddmingnworld]

Need some opinions here; I know a stupid question deserves a stupid answer but nonetheless I need some answers to this:

Someone I know has a car w/Loan, let's say John Doe owes $5000 on the car; it's worth maybe $12K...He/She can't afford to make the car pymt's anymore but at the same time don't want the car repossessed....credit is already ****ed up.....This person is thinking about telling the bank the car was totaled and they didn't have insurance at the time of the accident.....

Now here's the twist...The only reason they are saying this is to make minimal monthly pymts to get the notes current & avoid repossession...Is this a brilliant idea or just someone being incredibly stupid and/or irresponsible....I know the answer but want your comments...

T

 

[DCEPTCN]

Incredibly stupid. There's a word for it: Fraud. I wouldn't be surprised if the financier called the insurance co. and found out that the ins. WAS indeed current and busted the lie right there. If the ins. has lapsed, then He/She is in jeopardy of reposession anyway. I've heard that some of those debt consolidation places are fairly good with stuff like this, although I'm unsure if they could help in this particular situation. Ideas like that are not only stupid, but CRIMINAL. Always ask yourself, 'Wouldn't somebody else have thought of this by now?'. Please don't allow your 'friend' to get him/herself in that kind of trouble.

 

[Raymond Bunch]

Very well put Sylvan

Also, integrity is everything.....

Tell him to notify the lender/Bank whatever and most of the time they will work with you.

In saying this, they know people go through hardships sometimes and they can be very understanding just as long as you try to pay something. I'm sure they will work with you on it and don't let your friend put himself in a possession he will regreat!!! That's NOT cool.........

 

[toddmingnworld]

Thanks guys for your feedback....anybody else before I take this info & slap someone over the head w/it.....

T

 

[Dan Buick Man]

Owes 5K and the car is worth 12K? Did I read this right? Sell the damn car. Most finance companys require you have full insurance.

 

[Buick From Hell]

1- Bank wouldn't care if the car was totalled or not, they'll want their money...

2- Making "minimal payments" will NEVER "get the notes current". See #1 and keep adding "accrued interest"...

3- What Raymond says, talk to the bank about the problem, they may allow them to make interest-only payments for an agreed-upon amount of time. Just remember #2...

4- sitting in court fighting a fraud accusation against you sucks...

 

[XLR8]

If there is no insurance on the car, the bank/finance company can force insurance at add it to the loan. If your friend owes $5000 on a $12,000 car either sell it and buy a $7000 car - OR - call the bank/finance company and rewrite the loan. A loan on $5000 will be well under $200/month depending on the new loan term.

 

[kh440]

Definitely a dumb idea, not to mention highly illegal. Totalled, stolen or burned to the ground the bank still wants the money from someone. If there's no insurance loanholder is still liable. And if bank contacts last known insurer then you really have opened a can of worms. Best bet is to either refinance the balance or go through bankruptcy protection/debt consolodation.