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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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We can no longer afford to make payments on our travel trailer

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We can no longer afford to make payments on our travel trailer purchased new in 2008. If it ends up being repossessed I understand the seller (or bank) can bill us for the difference in what they can sell the trailer for and what we owe as well as the expense incurred for the actual repossession. Is that true? I also realize a repossession will have a negative effect on our credit rating which up to now is perfect. How bad might the effect be? The balance owing on the trailer is about $25,000. Even though it's in like new condition I know it would never sell for that much. Thank you for your assistance.
Welcome to JustAnswer,

So sorry to hear of this dilemma. If my answer is not clear to you, please ask me for clarification by using the reply button.

Unfortunately it is true that when a travel trailer is repossessed, a judgment can be entered by the court for any amount of the loan that remains unpaid. This is called a deficiency judgment. The deficiency judgment can be used to execute on other property and wages of the borrower.

Both the deficiency judgment and the repossession will be significant negative statements on your credit report.


Please use the REPLY button if you have any questions concerning my answer. Otherwise please click ACCEPT so that I am paid by the site for answering.
Customer: replied 5 years ago.
Does this mean that with a deficiency judgment a lien could be placed on our home which we own outright, for example?
Yes it does.

However in Arizona you are entitled to a $150,000 homestead exemption
Ariz. Rev. Stat. § 33-1101 (A)

This means that in the event of a forced sale of your homestead due to the deficiency judgment, you would be entitled to the first $150,000
Customer: replied 5 years ago.

Since our home is worth less than $100,000 does that mean our home would be safe?

 

Yes it does :-)
Customer: replied 5 years ago.
One last question. Our income consists of social security and a small pension. Would that be in danger? Thanks so much for your help.

JustAnswer requires new questions to be posted on new question pages. That said I will answer this question. Your Social Security and pension are exempt and therefore protected from this deficiency judgment. I wish you the best of luck
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