Finance/Repo Advice Needed.

[nwdiver]

Head home live on the boat, work and make the boat payment, when the Insurance money comes in rebuild the 4 plex then head out again, its only time.

[Charlie]

Ok Jim I'll buy it for $60k and save you the trouble. Just kidding. If you don't bring it to them they are going to have way more then $6k in costs. I like DOJ's advice have your lawyer ask them to make a deal.

[denverd0n]

Well, obviously, if you want "serious advice" then you shouldn't be asking a bunch of strangers on the internet. Your attorney may not know what the lender is likely to do, but he can certainly advise you on the legal issues related to defaulting on your loan. That's where you need to be getting your "serious advice" from.

That said, there's a part of me that agrees with Tscott8201--you made a deal, you should live up to it. And there's another part of me that agrees with those who say, if the lender won't cooperate with you then why should you cooperate with them?

On the other hand, having worked in the lending field for a number of years, I find it hard to believe that they are completely stonewalling you. Though, if you told them that you wouldn't pay them a single penny for the next who-knows-how-many months, I'm not surprised that they took a hard line. They want to see something--anything--coming in on a regular basis. That's where you have to work with them.

The comment from nimblemotors is relevant here, too. If they can't get your boat, they most certainly can go after other assets. Like your real estate. Is that what you want?

It's an unfortunate situation, and I feel for you. There aren't a lot of really good options here. This is a good example of why financial advisers will always tell you to keep an emergency fund available that can cover your expenses for at least 3-4 months. For someone sailing off over the sunset, I'd say an emergency fund of at least 6 months would be a much better idea. Otherwise you are taking the risk that you could suddenly lose everything if something unexpected happens.

Best of luck to you, however it works out.

[hellosailor]

Jim/Mo-
In the end your options are limited by what the finance company will do. If they assert title to the boat you could be stopped and detained at any border and the boat seized, I suppose.
But on the bright side, ask your attorney about "bad faith" insurance suits and consequential damages. If the insurer is acting in bad faith (legal term) they may be liable for all consequential damages, including the loss and replacement of your boat if it is seized. Your attorney might want to remind them of that, in order to encourage them to settle now, rather than pay up in court and have to buy you a new boat.
Then again, if your attorney says "Good idea! I should have thought of that!" then you might need a better attorney. Something to explore either way.

[redvalaria]

[

Will they really come looking for it? Mexico, Guatemala, Panama or points South?

QUOTE]

Personally, that's even a little "too close" for my tastes. Its a boat....get sailing. Somewhere a bit further afield if that's your choice on the matter. I personally could have gotten lost in the med for nearly a year before anyone "cared" where I was. Keep moving would be my other caveat. Harder to hit a moving target....

Good luck.

[David_Old_Jersey]

Where your lawyer will really be able to help is knowing what to say (in writing) to them that later looks good in court. Of course it could well be that in your jurisdiction the fact that you have been trying to be reasonable and constructive (or at least look like it on paper!) does not matter one jot when the case (to enforce the debt) comes before a judge - but it could be important. Your lawyer will know.

If it is important, then even if the Finance Company do not agree a deal (for a year?) then 2nd prize would be a judge either imposing a deal or at least agreeing to kick the case into the grass for a few months or so.

You might also want to throw in (via the lawyer) that to relocate the boat (to the USA) will cost money (get a "full" quote for a delivery skipper!, plus add generous provisioning costs!) so that it is clear that at present the boat is underwater on the loan - but your moving the boat to the USA will improve that position, including on a higher sale price as in a bigger market.

Lawyer will also be able to advise you on likely timescale for the Finance Company to start firing it's (legal) bullets - and also to explain what they will mean, in both theory and practice.........your solution could well involve simply buying time, even at the price of taking a few hits.

I am still not a lawyer .

[RedHerring]

Originally Posted by Gemini_Jim

Value: $90k
Sale @ auction: $60k
Less "costs": - $6k. ?
Balance applied to principal: $54k
...
Is that unrealistic?

I had a bit of experience with distress sales of ships; judging by that, this is probably unrealistic. When people get a chance to stick some "costs" to you without negotiating, you'll be surprised what they can come up with.

[hellosailor]

david-
The finance company (or more likely, one rep at the company) could be well within their rights and not so crazy at all. If the boat has a market value of $150k and the loan balance is $75k...Well, they stand to make money by calling in the loan and seizing the boat, don't they?
That might be outright unfriendly but then again, that's how too much business is done, and legally done, these days.
Of course that can also be one over-zealous rep and someone more senior might change that decision...but that's all trivial for any competent lawyer to look into.

Seems that maybe two years ago there was a thread about a 50-ish footer that might or might not have "sunk" to disappear someone in south America with a question of whether that was to dodge a finance company. Never did hear an end to that one.

[Dockhead]

Originally Posted by Gemini_Jim

It's tough to place an objective price on something you are so attached to.... similar boats on yachtworld $80-110k. I owe a bit less than $60k. Of course My Boat is much better than any of those

Will they really come looking for it? Mexico, Guatemala, Panama or points South?

As best I can figure it would work something like this if I let them take it:

Value: $90k
Sale @ auction: $60k
Less "costs": - $6k. ?
Balance applied to principal: $54k

Leaving me homeless and owing $5k on a boat I no longer possess.

I know it may sound like a bad thing to do but, if I can, I would rather lie low for a year until I can make financial amends. Instead of giving up my dream and my home.

Is that unrealistic?

I never get involved in threads like this, but Im going to make an exception here.

I am a lawyer, although I spent my career representing big companies rather than regular folks. What I am about to say does NOT constitute legal advice.

I would do two things, if I were you:

1. Communicate very clearly to the finance company that you are in a temporary bind, but you will get through it and will pay up. It is extremely important that this message get through. Even if the finance company is run by a bunch of morons, one of them might notice that there is a chance to collect, which might lead to different decisions about how far to go to repossess.

2. Lose the boat somewhere where no one can find it, and don't tell a single soul where you've left it. That is because you do NOT want the boat sold at auction, which will not result in a proper valuation, as you correctly calculated. This is morally justified because you WILL pay them off later with interest and penalties, RIGHT? The interest and penalties will be much cheaper than the loss of value of the boat at auction.

Meanwhile, I would do one more thing, to wit:

If it all goes tits up -- and in this life such a thing is always possible -- get ready to go back to work and start over with no fourplex and no boat. It's not the worst fate in the world, like getting cancer, for example.

[Paul L]

There is a lot of information on ship arrest in various countries here Arrest Procedures | ShipArrested.com Network
or search Google for Toney-s-on-Arrest-of-vessels.pdf

[boatpoker]

[QUOTE=hellosailor;1323785]david-
The finance company (or more likely, one rep at the company) could be well within their rights and not so crazy at all. If the boat has a market value of $150k and the loan balance is $75k...Well, they stand to make money by calling in the loan and seizing the boat, don't they?
QUOTE]

Not quite. After covering the loan, all costs associated with recovering the vessel and all costs related to the subsequent auction of the vessel, any funds remaining must be paid to the debtor.

I can only speak to reposssed/auctioned boats in Ontario but a reasonable rule of thumb here on auction sale prices would be 10-15% less than the Low NADA Price which we all know are very low to begin with.

As someone previously stated the recovery costs and auction costs escalate rapidly and I think you'll be shocked at what they add up to.

The chances of them investing heavily in tracking you down out of country for this type of money are slim to none. $60k is chump change for them.

PS. This is an area I am frequently involved with.

[nimblemotors]

One thought is to sell off some equipment on the boat
if that can give you some time to put off default and get home
so you can get a job to make the payments.
Find someone willing to pay for their transport from where you are to where you are going to get some cash?

[Celestialsailor]

Originally Posted by Gemini_Jim

I know it may sound like a bad thing to do but, if I can, I would rather lie low for a year until I can make financial amends. Instead of giving up my dream and my home.

Is that unrealistic?

Well...it was unfortunate and could happen to any of us. I'm heading south, strangely enough in less than a day. My house is rented out and Insured but I know that means diddly if the Insurance company decided not to pay after a problem.
Sometimes it's best to do nothing and wait. The last thing the Insurance company wants is to try and get the boat back to a marketable area. The other thing you could also do is leave the boat where it is, fly back, stay with family until the 2 of you get jobs and keep the slip rent current and hopefully let the Insurance happen and get back to where you were.

[rognvald]

I am very disappointed, but not surprised, at the comments of some of the respondants who advise to hide the boat and renege on your obligation. Let me ground you in the reality of 21st Century American jurisprudence and established practice by lending institutions.
1. If you want to destroy your 800 credit score, take the advice of the
the backporch attorneys and hide the boat and cease
communication. Every month you are in arrears, your credit score
will decline and the repo men will be looking for your boat. If they
believe they cannot recover their collateral/property, they will
charge-off the account and send verification to the credit bureaus:
Equifax and Trans Union. This negative report is as serious as a
repossession or a mortgage foreclosure and will prevent you
from obtaining any credit in the future.

2. If you want to have an amenable end to this personal tragedy, do
not cease communication with your lender but attempt to plan
a real resolution to your problem where their collateral is
protected and you continue to show "good faith" in making
payments, if even partial. Be certain that they believe you
will resolve your present difficulties and reaffirm your obligation.
If you are having difficulty in reaching an agreement, a qualified
attorney should be able to get the job done. Remember, the loan
company really doesn't want your boat, their want their money.

3. Your tragedy is real. Do not compound your problems by doing
the wrong thing.


Good luck, good sailing and I hope you will resolve your problem successfully.

[sailorchic34]

Actually its a bit worst then that. They don't get to sell it to the highest bidder. It gets auctioned at the count court house and sold for maybe 10 percent of the value or less. After paying a skipper to sail it back.... Hum, Not for the $5k to $10k they might get for the boat.

So the question is turn over the boat and be homeless and be still owning money to the bank or live on the boat somewhere else.

If you decide to live on the boat, you will want to remove all assets you still have in the US, as they will be claimed for amounts over the civil exemptions. Including any money in banks. BTW the exemptions are exactly the same as the bankruptcy exemptions. If for example you have a $50k or $150K (depending on state) homestead exemption and you claim your boat as home, You might be free and clear. Talk to your lawyer about that. Turns out folks can't sue you for every dime you have. Each state has exemptions. Check your states out.

Me, I'd live on the boat and let the bank seize the land the apartments were on.

A credit score in the US is really only important in the USA and only if you want future credit. If you have social security, it to is exempt, provided it goes into an account that ONLY has SS in it.