Tips on Buying Cars: Desperate, voluntary repossession, pontiac grand prix

Question
Two months ago we traded in our SUV for a 2008 demo Pontiac Grand Prix.  We found out earlier this week that our son will need heart surgery very soon and that I will be out of work for at least 8 weeks making it very difficult if not almost impossible to make the payment on the vehicle as our budget is already pretty tight.  We are wondering what our options may be.  Should we stop making the payments let them repo the car or try and sell if for less than we owe?  If by some twist of fate we are able to sell it for less than we owe, then what happens?

Answer
1) Allowing the car to be repossessed will destroy your credit; in fact, few things will do as much damage to your credit rating as a repossession.  And don't be fooled by the term "voluntary repossession," as it doesn't matter when it comes to your credit rating.  Whether you're cooperative with the bank and turn it in yourself, or they drag it from your driveway as you're throwing rocks at the tow truck, they'll both drastically lower your credit rating.

2) If you sell it for less than you owe, then you'll have to pay the difference yourself.  If you owe $22,000 and you sell it for $17,000, then you give the check you get from the seller to the bank, along with your own check for $5,000.  The bank doesn't care where the money comes from, just as long as they get paid.