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P. Simmons
P. Simmons, Attorney
Category: General
Satisfied Customers: 34957
Experience:  45 years old, retired Marine Officer, current attorney
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I have a 38 santiago carver motor yacht. I had it for over

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I have a 38' santiago carver motor yacht. I had it for over 10 years old. I'm upside down on loan to value of boat. $50,000. difference. What are my options. If I have them repossess the boat here in TN., how would it effect me in other credit areas? I'm paying quite of bit on my slip fee.
Thanks for the chance to help. I am an attorney with over 12 years experience. Hopefully I can help you with your legal question.

Repossession could trigger several things

First, there will be a significant "hit" to your credit score.

Perhaps more significant would be the actions of the creditor to attempt to recover the debt. The creditor can sue you for the "deficiency", that is the difference between what the vessel sells for at auction and what you owe on it. So if you are $50K upside down, after all the smoke clears, it would not be a surprise to see a deficiency of $60K or more. They sell at auction so they may not get the full value, and they can charge for the cost to recover and sell the vessel.

If you have other assets or income, they can seek to enforce that deficiency.

One thing to consider is going to the creditor and asking to do "short sale" agree to sell the vessel in return they agree to allow you to waive some or all of the difference between what you owe and what it will sell for. The creditors will consider this since they know you will be able to sell it for more than they will get at auction.

Now, they may not want to do this...they would much rather you pay off the entire loan. But if you can show them that you have little assets for them to collect if they sue you, or that you are considering bankruptcy if they sue you, they may be willing to consider a short sale.

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