If I have an RV loan that I must default on, is it better to call the bank up front and tell them or let it get repossessed?

Get Legal Help Today

 Secured with SHA-256 Encryption

If I have an RV loan that I must default on, is it better to call the bank up front and tell them or let it get repossessed?

I owe $17,500 more on the RV than the blue book value. I can’t get a loan for this amount and the bank won’t work with me. I can’t keep up the notes of $523 per month.

Asked on June 6, 2012 under Bankruptcy Law, Texas

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Look at your agreement and review it for any penalties associated with defaulting on the loan.  Some will include extra penalties for involuntary repossessions.  Small cars are fairly inexpensive for a bank to repossess-- just call a tow company.  RV's are larger and more expensive.  This means that they will eventually pass this cost on to you.  If penalties like this are included in your note, then you would be better off doing a voluntary surrender to avoid the extra repo fees.  You will still be liable on the debt until they resell the RV.  You should receive a credit for any amounts of the sale price.  For example (assuming that you owed only $17,500), if the RV sells for $10,000.00, you will only be liable for the balance of $7500.  But you will also be liable for any other fees-- so do what you can keep those costs as low as possible.  There may be some other provisions in the note which could be helpful, but you just need to read it carely to follow the process for invoking any other return, surrender, or default procedures.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption