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I did a voluntary repossesion of a boat. The balance owed is 52k. The loan is still with the lender and has not gone to a

Tampa, FL |

Collection agency. They want me to set up a monthly payment plan and they wont send to collections or take legal action they say. In the long run am I better off doing this. I am thinking of my credit which has taken a hit but still is above average. Are they being upfront with me.

Attorney Answers 4


  1. It is always better to get agreements with regard to payment arrangements in writing. If you are struggling to pay your debts, you might consider bankruptcy as a possible solution. I recommend you consult with a bankruptcy attorney in your area. You can find a good one by clicking the Find A Lawyer tab on this website.

    The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.


  2. This is a lot of money. Will you ever be able to pay it off with monthly payments? If you are looking to settle, you can often get a better deal by offering a lump sum of cash instead of going the payment route - maybe $20K instead of $52? See an article published by my esteemed colleague in Ohio for more information on this topic. Hope this perspective helps!


  3. Impossible to say. This sort of arrangement is not uncommon. It might still impact your credit, depending on how the lender will report the loan during repayment.

    The legal analysis of any situation depends on a variety of factors which cannot be properly represented or accounted for in a response to an on-line question. Any answer, discussion or information is intended as general information only, is not intended to serve as legal advice or as a substitute for legal counsel, and should not be relied upon in making any decision. If you have a question about a specific factual situation, you should contact an attorney directly.


  4. Your entire financial picture (not just your credit) as well as your future goals should be considered here. Will you need credit anytime soon? Did the bank handle everything in a commercially reasonable manner (as per the Uniform Commercial Code), or did some cowboy banker flip the boat to his buddy for next to nothing? How accessible would your assets be if the bank got a judgment, and are there legitimate things you can do to put those assets out of reach? How litigious is the bank (or, if you know who the bank sells bad debt to, how litigious is their habitual Junk Debt Buyer)?

    Without going into all of it, it's difficult to advise you. However, there is an old saying among bankers: "Your earliest loss is your best loss." Having already repossessed and sold the collateral, the bank may be quite amenable to taking a lump-sum settlement. You might consider offering ten cents on the dollar for a full and final settlement and release (keeping in mind that you will have about $46,800 of cancellation of indebtedness income to grapple with come tax time next year--they will send you a 1099c form).