Is a voluntary car repossession or bankruptcy worse for your credit?
%REPLIES% Answer I was told a voluntary car repo is worse, because that will be on your credit report as repo. With bankruptcy (Chapter 13) you are making payments Answer In terms of credit score, I can answer half of that question. I was at a bankruptcy conference in Indianapolis last year where the speaker had worked for a major credit reporting agency for 20+ years, and he said that bankruptcy normally reduces your credit score by 75 to 150 points.
I don't know how much a repo reduces your credit score, but if you can find out, you know what to compare it to. The guy said the credit reporting companies are hush hush about how your credit score is determined, so no credit reporting agency will give you a clear answer to that question, but loan officers might have an idea of what the repo would do to your score based on what they've seen it do to other peoples' scores. In terms of duration, a repo is on your credit report for 7 years, whereas a Chapter 7 bankruptcy is on your credit report for 10 years.
A Chapter 13 bankruptcy is on your credit report for 7 years (same as a repo). Also, I'm not sure if credit reporting agencies even distinguish between a voluntary and involuntary repo. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person Answer A debt consolidation lawyer once said you can dispute a bankruptcy or a repossession with the credit bureaus, they have 30 days to verify, if not it must be removed.
The best time for disputing these things is around Christmas or other holiday "busy" seasons. "The employees that do verifications for the CRA's are required to do 10 verifications per hour (quota), however they are only paid approx. $7/hr." (Quote taken from a report from a lawyer's research posted at the credit info center.
).
Have you done everything you can to avoid auto repossession, then you may want to consider a voluntary auto repossesion. Voluntary auto repossession is a process that involves voluntarily returning a vehicle that you have purchased back to the dealership or bank. Many people choose to do this when their financial situation takes a turn for the worse and they are unable to make their car payments.
It is important to note, however, that turning the vehicle in does not reflect well on a person’s credit report and also that it does not eliminate the borrower’s liability on the loan. What typically happens in a voluntary auto repossession is that the dealership or bank will try to resell or auction the vehicle off. The amount of money made on the sale of the vehicle will be deducted from the amount still owed on the loan and the borrower will be responsible for the rest.
This will still have a negative effect on the borrower’s credit rating and may still leave them owing quite a bit of money. Before making the decision to voluntarily turn a vehicle in a person should call the bank and get the payoff amount on their loan. Then they should look at what the current blue book value for the vehicle is and what similar vehicles in their area are selling for.
If it seems feasible to sell the vehicle for close to the loan payoff amount, the person would be much wiser to go that route as an early pay-off of the full amount of the loan will have a much better effect on their credit rating. Other alternatives to voluntary car repossession include remortgaging a home to consolidate date and reduce the total monthly financial obligation. This may be a wise choice for many people when their income is reduced and/or their debt has become too great.
Of course, if there is no other viable option, a voluntary car repossession and subsequently filing a bankruptcy may be the only way out of the debt, but it is important to remember that while you may no longer owe the money the consequences of this choice will last for many years to come.
I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.
Related Questions
What happens to a cosigner of a car loan when the primary loan holder files bankruptcy and the loan is discharged and they do a voluntary repossession?
When a bankruptcy is removed from your credit report after 10 years if someone pulls a credit report does it still show bankruptcy on the report?
What happens if you don't pay your car loan, but they can't find your car for repossession?
Can a car repossession be removed from your credit report because another family member was responsible for the loan?
How can you repair your credit after a car repossession?
Once the bankruptcy has been discharged how do you get the creditors that you filed bankruptcy on to show as satisfied or closed on your credit record?