I’m so ashamed of my son

Hi Barefoot,
 
My 20-year-old son’s (ex) girlfriend signed up for a car finance loan so my son could buy a $21,000 car. The car was registered in his name, the finance contract in hers. He promised to pay her the monthly amount owing on the contract, but this was never put in writing. He made a couple of repayments, then crashed the car. It was only insured for third party fire and theft. They broke up. It’s now unregistered, uninsured and undrivable. He’s refusing to pay her anything at all and isn’t taking her calls. I’m incensed, angry and embarrassed about how he’s treated her. She’s obviously very upset – she’s only 20 herself, has been left with a five-year debt, and is just a student with a part-time job. My question is, can she get out of the contract? What are her options?

Edwina
 
Hi Edwina,
 
So this is the first question in 20 years that’s truly stumped me.
 
And no, it’s not because I don’t know the answer, which is actually quite simple:
 
Your son’s ex-girlfriend will not be able to get out of the contract with the lender. It’s now a civil matter, and if she wants to pursue it she’ll need to get independent legal advice (which she’s unlikely to do as a broke student).
 
What I’m finding difficult about your question is putting myself in your shoes, as the parent.
 
What would I do?
 
Well, I’d give him a kick up the backside. (I know that’s not politically correct … but I’m not a politician.)
 
I’d tell him how deeply ashamed I was and give him an ultimatum: if he doesn’t make things right, you’ll cut him off financially from that point on.
 
Then I’d make contact with the ex-girlfriend and offer to make the repayments on her behalf.
 
I’d also encourage her to book in and see a financial counsellor (1800 007 007). They will likely suggest that she surrender the car back to the lender, and will help her apply for a compassionate debt waiver.
 
Hang on, why would the lender even consider waiving the debt?
 
For a few reasons:
 
First, it could be that your son coerced her into signing for the loan.
 
Second, it could be argued that the lender was at fault for not requiring her to take out comprehensive car insurance … or for lending a substantial amount of dough to a student on a very low income (take your pick).
 
Finally, given she’s a broke student, they may decide she’s not worth chasing for the dough (she likely has no assets and not much income, so the lender may be thinking she’ll go bankrupt and stiff them).
 
At which point the financial counsellor could negotiate a ‘full and final’ settlement of a few thousand dollars – which your little kidult should definitely pay.
 
Get your boots on, Mama!

Scott.