Should I Keep my car or turn in the keys?

Long story short, I have a 2005 Nissan Sentra, bought it brand new. I filed for BK just recently and opted to keep the car. Problem is I have to pay $300 a month for another 5 years to keep it. Just recently it’s been having some cylinder misfires I took it into the shop and paid $300 to replace the plugs and coils but it’s still misfiring…

So, what would you do? try to fix it and keep it hoping it will last another 5 years of payments, or turn it into the BK court and bum a ride until you can save up enough cash to buy a new/used car?

Thanks for your advice

It’s impossible to guess without knowing all your circumstances.

Did you lose your job?
What was the reason for the bankruptcy?
Do you own a home? Outright? Is in included in the BK?
What are you other liabilities?
Do you live in an urban area with a public transportation system?
Do yo have a family?
Will you need a car to work? To get back on your feet?
If you keep the car, how will you make the payments?

Bottom line: how do these payments fit into your overall needs and financial plan for recovery? Without knowing that we’re just guessing blind.

How good is public transportation where you live? Will you need a car to get another job?

If your car was a Caddy, or something expensive I’d advise selling it in favor of an econo car. That’s what you’ve already got. If you can find a way to keep it and work out your finances that’s the way to go. If insurance, repairs, and gas are putting you further behind then sell it and get out from under the payments.

When you get a few dollars ahead you may have to buy a beater, and hope to keep it going long enough to save some more money and upgrade as you can afford it.

Something doesn’t seem right here. If you really have 5 years of payments left, at 300 dollars per month, for a car that is already 4 years old I would say you need get away from that deal real fast. That’s $18,000 dollars still owed and I assume you have been making the same payments since you purchased the car new. At that rate you could get a new car and pay it off in the same time period. The interest rate on your loan must be in the stratosphere.

I assume your credit isn’t real good and to borrow money for a car loan is going to cost you a lot of extra cash. I would say the best thing to help you save some money is to purchase a car you can afford to pay cash for in order to avoid the high interest loans. If you can afford to pay 300 dollars a month for a car it shouldn’t take you very long to save a couple grand to get something to drive. When you get your credit in good shape then you can get a reasonable loan rate on a new car if you want. Some places currently are offering zero percent interest on new car loans, to those that have the right credit lines.

I know that with BK you are allowed to keep a vehicle with a value of $5000.00 or less. How is the value of this vehicle being figured? It would be clear to me how to figure the value of this component of your personal property if you owned it free and clear but you dont. What has you BK attorney told you about keeping the car and the payments or letting it go back?

If you remove the BK influence and just concentrate on the mechanical issues I would fix the miss, not all misfires turn into horror storys to diagnosis and repair,in fact a constant miss is one of the easiest driveability issues to resolve.

I lost my job because the company I was working for closed down. Only reason I filed for the BK was because I lost my job and wasn’t able to find one before the repo man came out, so I filed for a Ch 13. As far as assets, I don’t own a house or anything of any value. HSBC has the loan for the car and I owed around $15k on it when I filed.

Public transportation is not an option where I live (las vegas). Especially since I’m a student and my classes are offered at the campus 20 miles from where I live. Plus, my girlfriend relies on me for rides to and from work (she totalled her car when we first met) and she gets off work around 1 am, the buses stop running at midnight so she’d have to walk home at 1 am 10 miles everynight… not an option.

On the bright side, summer is starting and now I’ll be working at the campus across the street from my house, we have friends and family so getting a ride for my girlfriend to and from work shouldn’t be a problem. If we save up for 3 months, and wait for my student loan money to come in, my girlfriend and I could have $3-$5k to buy a used car.

There’s just one other problem, I have an interview for a new job on Monday, if I get the job I’ll need a car to get to work… But, I’ll be able to afford to keep the car (or keep it and save up some money for a used car).

If I don’t get this job, I can’t afford to keep it as I make around $500-$600/month working part time right now at the college. Rent costs me $400 and insurance for car is $145 so thats my whole check right there. My girlfriend helps out with food and gas. We do have bikes, so if I don’t get this job I guess I’ll give up the car and bike it out during the summer and save as much as I can, if I get the job I’ll prob. keep the car, fix it hopefully… but I still want to save up and buy a used car and turn this one over to the court… Thanks for your replies.

If you don’t get the job on Monday give the car back to the loan company and let them deal with it as soon as you can purchase something else to replace it. You have already paid them enough money to totally pay for the car and yet you still owe them a huge amount on it. You cannot afford the payments you are making on it, at this point in time at least, and to continue to pay on this car is serving only the loan holder.

The car right now, even if it were running fine, is not worth what you still owe on it.
What if the rough running problem is a serious one, such as a major engine problem?
(This is something the shop should have checked while the plugs were out by running a compression test. That is always Rule No. 1. Weed out a mechanical fault first.)

You say you opted to keep it. You have not officially reaffirmed this car debt on the filed BK papers have you?
If so, this is a huge mistake in my opinion and it’s likely you’re going to be in much deeper trouble in the future as you cannot file BK again for 6 years. This means in the event of payment default the lien holder can pretty much declare open hunting season on you.