“I’ve been to several dealerships in an attempt to get rid of my car and get into something more reliable and I keep getting the same advice. Because I owe $15,500.00 on a car with a trade in value of $5,000.00, I’m being told to just give up my car and start over again. If I were to surrender my car to the bank, what would happen and for how long would I be harassed by the bank to get the rest of their money back?”
I’m guessing none of the people giving you advice are people who work at your bank.
Consider this: Your bank is expecting to get $15,500, and you give them a car worth $5,000. If it were you, wouldn’t you want the other $10,500, too? So will the bank. In fact, they may not even want the car in the first place: Banks are in the business of lending money, not selling used cars.
I can’t say exactly how (within the law, of course) your bank would go about trying to collect their money, but five figures gives them quite a bit of motivation to get what they can instead of just writing it off. I wouldn’t expect them to go away quickly.
I’d like to offer some advice, but when a car loan is “underwater” by that much, there often isn’t much you can do until it gets paid off. Unless you can wrap it into a mortgage or borrow from relatives, there may not be a cheaper way to deal with it than just to pay it off.