Bankruptcy Law

Bankruptcy law questions? Ask a bankruptcy lawyer.

Ask a Lawyer,
Get an Answer ASAP!

This answer was rated:

I am considering defaulting on a boat loan. This loan is considered…

I am considering defaulting on...
I am considering defaulting on a boat loan. This loan is considered unsecured. Other than repossession, what are the legal and credit repercussions in doing this. I live in the state of New Hampshire. Considering the issues facing the banks right now, does this change my circumstance?
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Customer reply replied 9 years ago

New Hampshire


Already Tried:
I am not in any danger of declaring bankruptcy, but my current financial situation will not allow me to keep paying for this boat.
Answered in 10 hours by:
11/12/2008
VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
Experience: Chapter 7 & 13
Verified

HelloCustomer

 

If the loan is really considered unsecured, and it is not specifically named as collateral it cannot be repossessed. If the boat were collateral, they could repossess the boat, or you could surrender it. If you did this, they would sell the boat and come after you for the difference in what you owed on the note and what they got for the purchase of the boat. This is called a deficiency judgment. If they received a deficiency judgment they can execute on the Judgment and attach wages, bank accounts, lien property, etc. until the judgment is paid in full.

 

You should read over your security agreement or loan papers carefully to see what actions the creditor can take in the event of a default.

VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
Experience: Chapter 7 & 13
Verified
VanDLaw and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Customer reply replied 9 years ago
<p>Hello, thanks for the good answer. I'll be happy to accept. However, can you address the second part of my question regarding what this will do to my credit.</p><p> </p><p>Thanks.</p>

Certainly.....

 

If they report your personal loan in default, it will lower your credit score, as you probably know. It will be reported just like any other defaulted credit card or loan; if it is "charged off" it will state that the account was written off or charged off. Debt collectors will start calling you, and they could take you to court to obtain a judgment. If they get this judgment, they can attach wages and assets. There is a statute of limitations on how long they can take to obtan a judgment, and in New Hampshire it is 3 years from the date of last activity (usually this is the last payment).

 

The negative reporting will remain on your file for 7 years. After that time it must be deleted from your credit file.

Ask Your Own Bankruptcy Law Question
Customer reply replied 9 years ago
<p>Thanks for the clarification on my initial question.</p><p>A few more questions for you which I will gladly accept your answer...</p><p> </p><p>Can you clarify what you mean by "attach wages and assets"?</p><p>How likely is it that a judgement will be pursued, especially in this environment where home foreclosures are escalating and banks are seeking huge deficiency judgements? The deficiency judgement in my case would likely be $20 to $25K. Basically, the choice I face is to sell this boat at substantial loss (I have been trying to sell this thing for 1.5 years now) then make up the difference by taking funds out of a retirement account (at significant penalty) or roll the dice and simply let this account be written off, accept the fact that my credit takes a blow, and hope they don't come after me. Based on this situation, what might you advise?</p><p> </p><p> </p><p> </p><p> </p>

It would be really hard to say. I do know that because of the current situation they are being more aggressive than they were before because they are losing so much money. It used to be unheard of that a bank would pursue a small judgment because the cost was higher than than the return. Now they are just rolling the dice and hope they can get judgments and seize assets.

 

What I mean by "attach wages and assets" is they will sue you in a court, they may or may not receive a judgment. If they do get a judgment they will follow the laws of your state to collect on that judgment. New Hampshire does allow wage garnishment, and if they find out which bank you use, they will "attach", "freeze", "seize", take the amount that is in there on deposit up and until their judgment is satisfied. If they find out where you work, they will initiate a wage garnishment. If they find you have real property they will place a lien on the property so they get paid first out of any proceeds if and when you sell it.

 

Banks are seeking deficiency judgments, if your boat is NOT collateral then they can't get one of those, but they could get a judgment just on the personal loan default, so it really doesn't make a difference. You could sell the boat for whatever you can get, take the proceeds and put towards the note, at least you would paying it down. Wait and see what they do, they have three years.....it will crunch your credit if they report it, (and they will), and you will be hounded by a collection agency....but if they do not pursue a judgment then the difference is gone. If they do pursue one, you can always find the money then and make it go away. Another words you would be sacrificing a credit hit, but keeping the money..for now. In the end you may end up having to pay the amount just to keep a judgment off your credit report. You would want to do this, a "public record" hit, is worse then a loan default.

VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
Experience: Chapter 7 & 13
Verified
VanDLaw and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Customer reply replied 9 years ago
Thank you for the thoughtful answer. One final question. Would my wife's credit be impacted in any way by my loan default. She was not a signer on the original loan. Thanks.
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a bankruptcy lawyerLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask VanDLaw Your Own Question
VanDLaw
VanDLaw
VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
833 Satisfied Customers
Experience: Chapter 7 & 13

VanDLaw is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,720 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

513 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

376 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
I have the following debts: 42,000 student loan (Feds)
I have the following debts: 42,000 student loan (Feds) 14,000 car loan 12,000 signature loan 26,000 credit cardsI've been unemployed 5 monthsAssets: 22,000 in pension account 600 in Series e savings b… read more
mmdesq
mmdesq
Attorney
Doctoral Degree
518 satisfied customers
Filed Chap 7 Bankruptcy and it just got discharged. I have
Filed Chap 7 Bankruptcy and it just got discharged. I have refused to sign reaffirmation agreement with credit union on boat because my husband - WHO HAS NOT FILED BANKRUPTCY - jointly owns the boat a… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,720 satisfied customers
A Florida debtor who files bankruptcy has an unsecured
a Florida debtor who files bankruptcy has an unsecured credit card balance and a home mortgage with the same bank. If the debtor defaults on the credit card but keeps the mortgage payment current, can… read more
LawTalk
LawTalk
Attorney at Law
Juris Doctor
128 satisfied customers
I am a dentist and I have owned a dental practice for almost
I am a dentist and I have owned a dental practice for almost 12 years. I have come to the point where I cannot keep my head above water anymore. Its not that I don't produce. My ageing report is over … read more
John A. Flynn, Esq.
John A. Flynn, Esq.
Attorney/Owner
Doctoral Degree
87 satisfied customers
My father will be filing bankruptcy in the near future. However
My father will be filing bankruptcy in the near future. However he has a loan on a new vehicle that he needs to keep. Currently he owes $24,000 on the car and it is valued at $20,000. So his equity is… read more
socrateaser
socrateaser
1,031 satisfied customers
This is a Chapter 13 question. The Debtors have just been
This is a Chapter 13 question. The Debtors have just been confirmed. About 2 days after confirmation, one of the debtors had to be rushed to the emergency room and it looks like they could be in the h… read more
Elizabeth Prentice
Elizabeth Prentice
170 satisfied customers
on 4/23/2012 I asked a question about a boat loan. Things have
on 4/23/2012 I asked a question about a boat loan. Things have taken a dramatic change for the worse for me. Since my last question, my ex-husband stopped paying for the boat. He let it get repossesse… read more
Phillips Esq.
Phillips Esq.
Attorney
JD
20,147 satisfied customers
For Web law concerning avoiding involuntary bankruptcy I
For Web law concerning avoiding involuntary bankruptcy I just wrote to you asking you the criteria for possibly being forced into involuntary bankruptcy. It is CRITICAL for me to avoid being forced in… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
What is the worst that can happen if a person defauts on credit
What is the worst that can happen if a person defauts on credit card debt? I have a 30,000 credit card debt with Bank of America. I am straight commission and my income has been reduced by half over t… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
Chap. 7 CA. I have a single debt with a bank for a boat loan
Chap. 7 CA. I have a single debt with a bank for a boat loan and am planning Ch. 7. Is it a legal requirement or merely a courtesy to send them a letter explaining my intentions to file? Does it compr… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
I am purchasing a new home using money from an IRA account
I am purchasing a new home using money from an IRA account as a down payment. I understand that in 2011 I will owe income tax on the $30,000 I am pulling from my IRA (I am not yet 59). I also will hav… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
i am currently on unemployment, i have been on for 6 months.
i am currently on unemployment, i have been on for 6 months. I am past due several months on credit cards. (about 12k total credit card debt). I also have an auto loan that is current. I was in a debt… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
I am in default of a credit card for $10,000.00 and discover
I am in default of a credit card for $10,000.00 and discover bank has file a civil action, A judgment was awarded by default for failure to repond to the complaint. Am I in danger of losing my house… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
I owe 105K on a motor home that is now woth less than 50K.
I owe 105K on a motor home that is now woth less than 50K. I can't afford the payment of 900 month but I am not so far in the hole that i need to declare bankriptcy. I have tried to work with the lend… read more
FiveStarLaw
FiveStarLaw
Attorney
Doctoral Degree
477 satisfied customers
I have a loan with a bank with a remaining balance of 108k,
I have a loan with a bank with a remaining balance of 108k, original loan was 200k. My payments per mo are 1620.00. I've tried to refianance but my income is just Soc. & they will not refianance. I've… read more
Marcus Parker
Marcus Parker
Doctoral Degree
244 satisfied customers
My exs brother helped me years ago to obtain a car loan. He
My ex's brother helped me years ago to obtain a car loan. He is the primary and I am the co-signor. I just got notice that he is filing chapter 7 bancruptcy and I read that that will still be noted on… read more
JP
JP
Doctoral Degree
109 satisfied customers
in californa repo laws do i pay off what banks cant get out my out boat
i was told by my bank that when i turn it in they will send it to a auction to sell it and i will need to pay off the rest of the loan. is that true?… read more
JP
JP
Doctoral Degree
109 satisfied customers
I have about $40000 in unsecured debt (credit card and line ...
I have about $40000 in unsecured debt (credit card and line of credit). I also have a mortage and two car loans in my name (one is my husband''s car that he pays for but since he is on SSD he was not … read more
VanDLaw
VanDLaw
Attorney
833 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x