Yes, unless you had a contact that requires them to take back the car, which you don't. Options: pay or have your credit ruined for years or go bankrupt.
I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is at your sole risk. This is done without compensation as a free public service. I am licensed in IL, MO, TX and I am a Reg. Pat. Atty. so advice in any other jurisdiction is strictly general advice and should be confirmed with an attorney licensed in that jurisdiction.
Yes, generally a dealer can refuse to take back a car. The right to repossession of their security (collateral) is a right, not a duty. Moreover, if you owe a lot more than the car is worth, the repossession of the car wouldn't satisfy the debt.
An attorney skilled in representing debtors may be able to help you negotiate a settlement, especially if the debt may force you into bankruptcy.
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