Legal Question in Consumer Law in Massachusetts

Re: 8 years old ford motor financing

When you agreed to purchase the new trade-in for $39K, did you know you couldn't afford it at the time? If so, why did you sign the loan? I have a general rule that cars should not be financed for more than 5 years. If you have to either lease a car or finance it for more than 5 years, it means that you can't afford that particular car. You should look for a more cost effective vehicle.

In terms of your mortgage, it sounds like you have an Adjustible Rate Mortgage (ARM). Same question. Did you know you couldn't afford it at the time? Were you told that the mortgage would adjust over time? If so, then that means you couldn't really afford the house you were buying.

I'm so sorry that you're in this situation. It is not all your fault. In part it's a result of all the predatory lending that we're seeing unravel in the markets right now. Consumers need to be educated and should educate themselves in how to properly manage their money and not be offered loans that they cannot afford to pay back.

There's not much relief for the car payment that I can see except for maybe selling the car and owing the difference. If you sell the car now, you would most likely be able to get more for it than if the auto dealer repossessed the car and sold it off themselves. You will of course owe the difference but since the car dealership will have no collateral after you sell the car, there's not much they can take from you.

In terms of your home, if you ever find yourself in a position where you really can't make the payments, you will have to hope that the newly passed bailout plan will give you some relief.

Re: 8 years old ford motor financing

Through a Chapter 7 bankruptcy and a procedure called "redemption" you may be able to force Ford Motor Credit to reduce the loan to the current value of the car. If you have substantial other unsecured debts (like credit cards) then you may get a much larger overall benefit from a bankruptcy filing. If this is your only questionable debt, it's a tougher choice to make.

Most people can keep their house and car through Chapter 7 bankruptcy, unless they specifically choose to walk away from either. I offer free consultations, let me know if you want one.