If I default on a RV loan, but continue to pay a reduced amount for a payment, can they take me to court?

Question

If I default on a RV loan (750.00/13 years left on the note) but continue to make 75.00 to 100.00 dollar per month payments, and not missing a payment, (I know they want full payments) can they still take me to court and sue for the remainder amount (to get higher payments) after they sell the RV, or is there a reduced amount I could pay (10%/20%) to keep from going to court? Again, I know they would want 100% of the original payment, but what amount would legally or otherwise prevent them from taking me to court, if any?

Answer 1

Basically, what is going to happen is that the bank will repossess the RV and sell it at auction, for a relative small amount of the remaining debt. You will then receive a notice that you owe the remaining balance of whatever, my guess would be about 50% of the original note amount. If you don't work out an arrangement to pay this amount back they will obtain what is know as a judgement for the remaing amount. They may be willing to talk and work out a monthly amount of something like a hundred dollars or so, but generally they won't. They would rather have the judgement and be able to garnish you at work, attach your house and so forth. You might try and sell the RV yourself and work out a new loan for the difference as you would get much more for the RV that way, than by letting them sell it at auction. But, the simple answer is that there is no simple answer, as it depends on the bank and your history with them and the circumstances that brought about the default. You could also bankrupt against them and it would have been nice to know the amount of debt, but I am guessing that it is over $117,000. so you are in a pickle jar and I am of the opinion that the bank will go after the judgement.

Answer 2

Take comfort in the fact that you're definitely not alone in your situation. There are thousands of individuals/families that owe more on a mortgage loan than the house is appraised for due to the rapid decline in real estate values over the last couple of years. If you have a balloon only you know if you foresee that you will be capable of making payments going forward. If you don't feel you will be able to make the payments going forward I would first exhaust the refinancing markets. Refinancing will be hard with an underwater loan, but not completely impossible. If you strike out there and cannot make the payments then you can consider the forgiveness (1099-C). The reason I would suggest the forgiveness as a last resort is due to the credit ramifications it may have on you. Keep in mind that debt forgiveness does not have to be reported as income to the IRS only if: 1. Bankruptcy – the debt was already discharged through a bankruptcy proceeding. 2. Insolvency – your total debts exceed your total assets at the time your debt was settled or deemed noncollectable. 3. Indebtedness is due to a qualified farm expense. 4. Indebtedness is due to certain real property business losses. 5. Discharge of your debt was treated as a gift. When things are too good to be true in the world of finance, they are too good to be true. Trust your instincts. Nothing is free. You should take the offer if you need the offer to get by. If you can get by without it then don't take the easy route. Usually third parties do this sort of thing so if you have your mortgage with the same bank that is offering you the forgiveness deal I would be interested in knowing what their incentive is to have you take the forgiveness deal when you are current on your loan at this point. Check out the link below for a bit more background on this issue.

Answer 3

Yes they can. You broke the terms of the contract that you agreed too. If I were you, I sell the darn thing before it gets repossessed.

Call the bank and see what they can do for you. Odds are, they won't side with you.

Answer 4

yes!!!