My question involves an auto loan or repossession in the State of: Illinois/District of Columbia
In 2007, I co-signed a car loan (Toyota 2004 Camry) for my younger brother who lives in Illinois (I live in DC). I knew that signing it I could be reponsible for making the payments, and I was willing to do that. My mother needed transportation for chemotherapy and doctor appointments.
Little did I know a measly $250 a month payment was the least of my worries.
My brother's plates were apparently suspended due to not paying tolls on the tollways. He would just drive through them. Seriously! Just drive through them. I guess handing over 50 cents is just too much hardship for him. :/ It caught up to him when the state demanded $8000 (tolls and fines) to reinstate his plates. He was pulled over for driving on suspended plates, and the car was impounded in December.
He didn't tell me it was impounded. I didn't find out about any of this until I got a letter from Citi Financial Auto yesterday saying they repossessed the car for being abandoned at an impound lot. I have the option of getting it back if I can pay the impound, towing, etc fees but it comes to over $4000! Unfortunately, I can't manage that, and even if I could, the car won't be driveable until my brother pays the $8000 in back tolls.
The loan payments to Citi were completely current. We went past due 34 days once last year, but otherwise, 23 payments were made and reported to credit bureaus as on time. I carry too much consumer debt (though have made great progress toward paying it down) to consider trying to get a new loan to pay this one off in this economy.
Now, I understand they will sell the car at auction, or try to anyway. They'll get, what? Half the blue book value if I am lucky? Any proceeds from sale will go towards the balance of the car. I am still going to have a deficiency balance that is higher than I can afford to pay, probably around $8000 once you account for all the fees and such. Citi tells me they will garnish my wages up to 30%, or put a lien on my bank accounts or my retirement account (not that there is a ton left after the market dropped). If they take 30% of my paychecks, I will not be able to stay afloat.
Certainly I have learned a hard lesson about co-signing things. And I always intended, and still intend, that Citi get the money owed to them. I just can't make a huge lump sump payment. Will bankruptcy be my only option? Will creditors work on a payment plan against a deficiency judgement? I could probably manage to pay double the original monthly payment, maybe more, per month if I stop contributing to retirement, get rid of cell, eat lots of ramen noodles, etc. But if that is not an option, I don't know what I will do.
Am I just screwed?

