Owe money on a leased vehicle I turned in

by Debbie
(Westland, MI)

I have a situation that I need free legal advice on. I live in MICHIGAN. Back in May of 2011, I turned in my leased vehicle. I was WAY over mileage which resulted in my owing Ally (Formerly GMAC) $7,800.00 (roughly). I contacted them to see if I could "negotiate" this amount as I am not in a position to pay it, and they were wanting me to give them $1,100.00 down and $200 monthly payments. They claim that is the LEAST amount they can take. If I don't respond by 9/16, they will turn the account over to a collection agency. What can I do to make the payments to where I can afford them monthly? I have rent, car payment, utilities etc. and do not have this amount to give them. Any suggestions would be welcome.

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Oct 01, 2011
 Owe money on a leased vehicle I turned in
by: Debtcollectionanswers.com

First, you need to know that I am not an attorney, so if you want legal advice, please schedule an appointment with a consumer law attorney. I can however provide you with some advice about how to handle your problem.

You are in a difficult spot because $7,800 is a lot of money to owe to anyone. However, I understand why the leasing company rejected your offer -- it wants to receive the money it is owed more quickly that it will if it agrees to let you pay just $200/month on it. Therefore, it is holding out for something more. However, the longer you go without reaching an agreement about how you will resolve the debt, the greater your risk for being sued for the money.

I recommend that you look at your monthly budget very carefully to determine if there are any expenses you can reduce or eliminate to free up additional funds to put toward the debt. Also, can you work more hours or get a second job to raise the money you need? The creditor or collector will probably be more amendable to reaching an agreement with you that you can afford if it understands that you want to pay what you owe, don't have the money to pay it now, but are really making an effort to come up with the money you need. For example, it may let you pay the debt off over time or it may let you settle the debt, which would mean that you would pay it off in full for less than its outstanding balance. However most settlements require you to pay the settlement amount in one lump sum once you reach a settlement agreement.

Keep the lines of communication open between you and the creditor or collector and continue to see if you can work something out. It may take some back and forth negotiations however. Do not agree to pay more than you can afford though. If the creditor or collector does decide to sue you, contact a consumer law attorney in your area who helps consumers resolve their debt collection problems right away.

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