If we have a motor home that is worth less than we owe on it and we can’t afford the payments, can the lender come after us for the difference even if we return it to them?

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If we have a motor home that is worth less than we owe on it and we can’t afford the payments, can the lender come after us for the difference even if we return it to them?

I am retired and living on my pension and social security. We have no other income than the above and only an IRA account. We have been living in the motor home for 3 years because we can’t buy or rent a house and pay the RV loan.

Asked on October 28, 2012 under Bankruptcy Law, California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under the laws of all states in this country you can be sued for a deficiency judgment with respect to the motor home that you have written about if it is repossessed. I suggest that you work out some new monthly payment agreeemnt with the lender of the unit you have that you can afford in writing so as to avoid its repossession and possible negative results.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes, you can be sued by the lender after your motor home is returned to or repossessed by them, for the difference between the value of the home and what you owe on it. However, social security and most forms of retirement income are exempt from garnishment, so even if the lender has the right to sue you, it may not be able to get anything from you.


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