What can a bank do if I default on an unsecured loan?
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What can a bank do if I default on an unsecured loan?
We voluntarily gave our travel trailer back to the bank due to me being laid off from work and we are unable to make the payment. They sold it at auction for almost $8,000 less then what is still owed and we are told we are still responsible for that amount. What can the bank do if we default on this now unsecured loan?
Asked on October 21, 2011 under Bankruptcy Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The bank can sue you for the balance, either now or at any time before the end of the statute of limitations period, or the time to sue, which will be several years from when you defaulted. After suing--and presumably winning, if it is a valid debt--the bank's options are:
1) Garnish your wages, or take, with a court order, part of you income.
2) Execute or levy upon your bank account(s)--or take money out of you account, again with a court order.
3) Execute on personal property, or force the sale of some of your belongs, subject to certain statory exemptions which should parallel the bankruptcy exemptions.
4) Put a lien on any real estate you own.
5) Do nothing for now; wait until you are in a better financial position, *then* take action. A plaintiff who sues you and wins has years to act on a judgment.
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