Legal Question in Bankruptcy in Utah
I have a boat and a vehicle that I am no longer able to make payments on. If I just turn the collateral back to the bank will they come after me if it is not worth what I owe on the loans?
2 Answers from Attorneys
Bankruptcy will discharge, get rid of, any remaining liability after a voluntary surrender or repossession. This is true even if the bankruptcy was filed before the surrender or repossession, so long as the debt was incurred before the bankruptcy and there is no fraud involved. This also applies to homes.
The lender will come after you for the difference between what you owe on the boat and vehicle, and what they sell them for.
It would be best to try to sell them yourselves and see if the lender will work with you on any shortfall. That amount would be less than if the lender sells them.
If you are not successful and cannot meet your obligations bankruptcy is an option.
You may call for a free consultation.
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