If I let my boat go to repossession will I be liable for the balance on the loan?
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If I let my boat go to repossession will I be liable for the balance on the loan?
I owe $62,000 on a 12 year old boat that is costing me $1,500 per month. I can’t sell it and I would just like to let the bank take it. They won’t refinance it. I have never been late since buying it 10 years ago.
Asked on August 26, 2011 California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Unfortunately, if you default on your obligations and the boat is repossed, if the amount of money it brings in, when being sold at auction or otherwise following repossession, is not enough to pay off the $62,000 you owe on the boat, then the lender is allowed to sue you for any remaining balance. (E.g. say the boat sells for $30,000--net, after taking out certain allowed auction fees and expenses--then you would still owe $32,000; the lender could sue you for that amount.) You can certainly try to negotiate with the lender, to get them accept the boat back voluntarily as satisfaction of the loan (or possibly boat plus some additional amount of money), but whether or not they agree to that is up to them--you can't force the lender to settle for anything less than the full amount due to it.
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