Thank you

That is the key...to know what the difference is.

That way, you at least know your potential liability.

Lets talk about worst case. IF you stop paying the note, at some point they will take steps to repossess the boat and sell it at auction. Then, once it sells, they will know what the "deficiency" is. This is the difference between what you owe on the loan and what the property sells for.

The lender could them come after you and sue you for the difference.

So...at auction it sells for $45K and they have expenses of $5K associated with the sale...then the deficiency would be $40K.

SO they could sue you for that amount.

Now...will they?

Will they sue?

Depends...do you have assets (money in the bank) or income other than social security? Then they may well sue you.

But if you have no significant money in the bank or other assets and do not have income other than social security? Then you are "judgment proof" and have no worries...not worth suing you in such a case.

So really this depends on you...your financial picture

If you have nothing they can take, they are NOT going to waste the effort on a lawsuit.

Now...what if you do have assets? Or income other than social security?

In that case, you may want to take steps to avoid the default. It may be if you negotiate with them they will allow you to do a "short sale"...they work with you and let you sell the boat at market price (which will be more than it would fetch at auction) and you can negotiate what, if anything you have to pay.

Even if you have assets/income, you may be able to file for bankruptcy, and just the threat of bankruptcy can be enough to get the lender to work with you on a short sale. Remember, all they want is their money back, or as much as possible...so sometimes it is in their interest to work with folks like you to make that happen


Let me know if you have more questions