Jump to content

Debt Settlement on Auto Loan?

Guest Cacti

Recommended Posts



I fell far behind on my bills a few months ago. And was living in my car. While this was happening, the car loan was written off as noncollectable.


I am now trying to repair my credit. I've joined the us military and have a steady income. The auto loan provider called me a few days ago and said that they are willing to do a debt settlement at about $7500. I owe ~$10,000 on the car. The car is worth $8000. They also said that they would be willing help me sell the car. Alternatively, they said I can pay them about $350.00 a month until the car is paid off. At this point, I just want the car and the debt gone.


However, I don't want to do even more damage to my credit. If I choose to do a debt settlement will this hurt my credit further? Or would it be beneficial in the long run because it will allow me to repay the debt sooner? Should I pay the $350 for a few months before I sell the car so that I can repay the debt without doing a debt settlement? Or should I get this loan off my credit history as quickly as possible?


Thank you,

Link to comment
Share on other sites

As far as your credit report is concerned, the damage is already done.  The only thing that can technically help in a small way is for the now bad TL to show a "$0" balance.  Even with a $0 balance, it will show as a bad mark for the next 7 years.  It is up to you how you want to get it to 0, either by payments or settlement. 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.