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Are you asking if the loan company can repossess or if the co-owner can take the boat?
If you are asking about the loan company, are they listed on the title as lienholder?
Yes, they can still repo the boat.
While the statute of limitations has passed for bringing in a lawsuit (it is likely a 6 year statute of limitations for breach of contract), that doesn't mean that the money is not still owed and that the lien is not a valid lien.
Under the lien the company still has a presumptive right to repossess. If they sent your wife a 1099 for the debt write off then she might be able to sue to have their name cleared as lienholder under the theory that them repo'ing is equal to a "double recovery" but I've never actually seen anyone do that. It was a theory I was going to try on a case one time but it settled before the court ruled on it and at that time there were no cases indicating anyone else had tried it.
However, that approach would only work if she had been sent a 1099 because a "charge off" is just an internal accounting measure and actually has no legal effect on anyone's rights.
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