Uploaded June 2024 | Updated September 2026, 2 weeks ago
How do you get out of jail for a crime you committed and have 1000% evidence against you. You don’t, you serve the time. Likewise with this car situation, but less bad, you have 3 options, I’ll you all of them and I’ll tell you which one I would do and which I would not do and why. Truth is though, all these hurt.
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1. Option Number 1: Pay it Off in these ways
- Let's set up the example so we all are on the same page
- I bought a car for $30k, my loan balance is 25k and the car is only worth 20k ( I have 5K in negative equity )
The first way to pay it off is like this:
- Get on a serious budget
- Don’t spend any money
- Work some extra hours
- And use all the extra hours to get the negative equity taken care off
- Once you’ve done that, you sell the car, and boom you are done
A second way to pay off is this:
- Get a loan for 8k from a credit union or whoever will lend you the money at a good rate
- Use 5k to pay off the negative equity, sell the car, and be done with it
- Use the 3k to buy a cheap car
- And now you only have a loan of 8k to worry about ( use option 1 and pay it off fast )
Third way:
- Keep paying normally and be done in 5 years to 7 years
- You’ll end up paying a bunch of interest
- And would have had a massive missed opportunity for redemption
Tip: you have to be fast, and baby the car. To avoid losing more value as you try to pay it off.
2. Option 2: Declare Bankruptcy
- I call this a quick fix with long-term ramifications.
- Sure you get stress-free for your elf today
- But you pass on all that stress to your future self, and you will not thank yourself
For example:
- It's easy to file bankruptcy
- But it will destroy your credibility for buying a home and everything else
- Plus it says a lot about you when things get hard and you just choose to default
Tip: sometimes it makes sense. However it's usually a bad idea.
3. Do a voluntary repossession and hope, the lender doesn’t sue you
- Voluntary repossession, is you forfeiting the car
- But this is not a good idea
- It takes away the little control you have
If the car is worth 20k
- Once you forfeit it, they’ll probably auction it out, and then it can sell for 13k
- Then now you owe 13k-25k = 12k instead of just 5k you see
- Because you can't control the price they sell it
For next time
People don’t look at the price, they look at the monthly payment
⁃ Look at the price and value with my time
⁃ Someone sent me a 40,000 car yesterday and calculated it at $8 an hour ( it was 5000 hours of my life, 1 year, and 7 months of work for a car )
⁃ I can’t of it when I can instead invest it, make $4,000 extra dollar a year from profit and use that money to buy a beater
Remember when you make a mistake and the fix hurts, you tend to remember that
* PRO TIP*
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Disclosure & Educational Disclaimer:
Some links in this video may be affiliate links, and I may earn a commission. Content is educational and accurate as of posting; offers may change. I’m an accountant but not your accountant; always consult your own accountant/CPA or financial advisor. No income or results are guaranteed.
How do you get out of jail for a crime you committed and have 1000% evidence against you. You don’t, you serve the time. Likewise with this car situation, but less bad, you have 3 options, I’ll you all of them and I’ll tell you which one I would do and which I would not do and why. Truth is though, all these hurt.
💲Patreon Exclusive💲
patreon.com/tommybryson
😎Call Me😎: bit.ly/30IBr0i
😎Second Channel😎: bit.ly/3c4sVPS
👨🏽💻Financial Freedom Course👨🏽💻$100 OFF CODE: LONGTERM
Link: longtermteam.teachable.com/p/financial-freedom-steps-from-nothing-to-freedom
1. Option Number 1: Pay it Off in these ways
- Let's set up the example so we all are on the same page
- I bought a car for $30k, my loan balance is 25k and the car is only worth 20k ( I have 5K in negative equity )
The first way to pay it off is like this:
- Get on a serious budget
- Don’t spend any money
- Work some extra hours
- And use all the extra hours to get the negative equity taken care off
- Once you’ve done that, you sell the car, and boom you are done
A second way to pay off is this:
- Get a loan for 8k from a credit union or whoever will lend you the money at a good rate
- Use 5k to pay off the negative equity, sell the car, and be done with it
- Use the 3k to buy a cheap car
- And now you only have a loan of 8k to worry about ( use option 1 and pay it off fast )
Third way:
- Keep paying normally and be done in 5 years to 7 years
- You’ll end up paying a bunch of interest
- And would have had a massive missed opportunity for redemption
Tip: you have to be fast, and baby the car. To avoid losing more value as you try to pay it off.
2. Option 2: Declare Bankruptcy
- I call this a quick fix with long-term ramifications.
- Sure you get stress-free for your elf today
- But you pass on all that stress to your future self, and you will not thank yourself
For example:
- It's easy to file bankruptcy
- But it will destroy your credibility for buying a home and everything else
- Plus it says a lot about you when things get hard and you just choose to default
Tip: sometimes it makes sense. However it's usually a bad idea.
3. Do a voluntary repossession and hope, the lender doesn’t sue you
- Voluntary repossession, is you forfeiting the car
- But this is not a good idea
- It takes away the little control you have
If the car is worth 20k
- Once you forfeit it, they’ll probably auction it out, and then it can sell for 13k
- Then now you owe 13k-25k = 12k instead of just 5k you see
- Because you can't control the price they sell it
For next time
People don’t look at the price, they look at the monthly payment
⁃ Look at the price and value with my time
⁃ Someone sent me a 40,000 car yesterday and calculated it at $8 an hour ( it was 5000 hours of my life, 1 year, and 7 months of work for a car )
⁃ I can’t of it when I can instead invest it, make $4,000 extra dollar a year from profit and use that money to buy a beater
Remember when you make a mistake and the fix hurts, you tend to remember that
* PRO TIP*
INFORMATION IS EVERYTHING
💲Patreon Exclusive💲
patreon.com/tommybryson
👕Merch👕
teespring.com/stores/tommybryson
✅2 FREE AUDIOBOOKS✅
amzn.to/2Enayo8¬¬¬
🎁ACORN FREE $5🎁
Link: acorns.com/invite/38EYSU
⚡FREE KINDLE UNLIMITED⚡ (traditional reading)
Link: amzn.to/2VGbxt9
👨🏽💻DISCORD PRIVATE GROUP👨🏽💻
discord.gg/EcZEHpA
My Camera Gear: amazon.com/shop/tommybryson
✔ Help Us Reach 600,000 Subscribers: goo.gl/0wvm6w
😎All My Social Media😎
Link: https://linktr.ee/tommybryson ---
Disclosure & Educational Disclaimer:
Some links in this video may be affiliate links, and I may earn a commission. Content is educational and accurate as of posting; offers may change. I’m an accountant but not your accountant; always consult your own accountant/CPA or financial advisor. No income or results are guaranteed.
