I purchased a used vehicle from drive time about two and a half years ago. I am upside down in the vehicle drastically, due to a very high interest rate when my credit was low at the time. However my credit is now much better however they told me they would not refinance the loan because they don't do refinancing at all on any loan. the vehicle is also not able to drive safely its stalls and stops very frequent due to a recall on the vehicle but Ford is not covering the maintenance do to the recalled because my vehicle is over the mileage where they will cover it. at this point I can get a brand new vehicle with no money down due to my credit being better. I want to give drive time back their vehicle and just voluntary surrender it I currently reside in Texas. what options do I have after voluntarily surrendering the vehicle can they garnish wages? Or can they sue and garnish wages? If I file bankruptcy will it affect the new car loan I just got.
Answer
Let's get some of the simple issues out of the way. In Texas a creditor on a car note cannot garnish wages. Yes, the bankruptcy may negatively affect the new car loan.
You cannot surrender a vehicle to a dealership to avoid a loan. Often the loan isn't even held by the dealership and the dealership is not going to want the car back or to pay off your loan. If you stop paying on the loan then the lender will eventually repossess the car and the loan will default, leaving you to pay the balance of the loan after the lender disposes of your vehicle. The lender will probably send the debt to a debt collector who will harass you for a while and possibly sue to obtain a judgment against you. It's hard to collect a judgment against a person in Texas but the default and repossession will end your good credit for a long time.
There's no easy answer for you. I'm not sure why you didn't try to deal with this at the same time you made the loan on your new car but that probably was the best time to have sought out a remedy.
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