21 Mar When a friendly car loan goes wrong

Q. I let my nephew and his wife take over my payments for my car, but my nephew and his wife are not together any longer. She will not give my car back and she’s not making payments. My credit is going to hell. What can I do?
— Desperate

A. This sure is a difficult and emotional situation.

Let’s look at some possible solutions for you, and it all depends on your goal.

Do you want your nephew’s ex-wife keep the car and take over the loan?

In this scenario, you can explore a few options.

You can contact the bank or financing group that owns your loan and discuss with them the steps necessary to transfer it to your nephew’s ex-wife, said Chadderdon O’Brien, a certified financial planner with RegentAtlantic in Morristown.

Another option would be for your nephew’s ex-wife to get a separate loan from a new third party, he said.

“The new loan proceeds would be transferred to you at which time you would pay off your loan in full,” O’Brien said. “Once your loan is paid off, the bank will release the title to your nephew’s ex-wife.”

Of course, in either of these scenarios, she will need to satisfy the lender’s underwriting standards and be approved for the loan, he said.

The simplest, but perhaps the least likely, is for your nephew’s ex-wife to purchase the car from you outright with no lender on her side of the transaction, O’Brien said.

“This, too, would provide you with the funds to pay off your loan,” he said.

O’Brien said if your goal is to get the car back and your nephew’s ex-wife is unwilling to cooperate, it’s time to contact the appropriate legal authority to determine what the appropriate next steps are.

Of course that could be ugly, but it’s not like your nephew and his ex are doing anything to make your life easy — and you need to protect yourself.

“Outside of getting law enforcement involved, you may be forced into getting the past due payments settled in order to salvage your credit,” he said.

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