Legal Question in Real Estate Law in Utah

Re: Bankruptcy or voluntary repo?

If you voluntarily allow the trailer to be repossessed you will be liable for a deficiency judgment. The bank will sell the trailer at an auction for a fraction of its value, then will look to you for the difference - the deficiency judgment. You may also be liable for lot rent depending on the terms of your rental agreement.

You may want to consider selling the trailer at a loss - it would be less expensive than the deficiency judgment. Consider an offer to sell on a lease purchase, where the lease amount is enough to cover your costs; or sell it on a contract, with little or no down. Last resort rent it out if you can. Your last recourse should be to let it go back to the bank, since it will probably force you into bankruptcy.

If you do file bankruptcy, under Chapter 13 (wage earner plan) you may be able to adjust the amount of the loan downward to bring it into line with its true value, plus you can pay some or all of your creditors. It is a better option than a Chapter 7 liquidation bankruptcy.