Full question:
I am a 76 year old woman who, because of a 'scam', found that I have a travel trailer on my credit report. I was a party to this so it is not the banks fault, I just did something foolish. Now I found the person who was involved and has paid on the trailer for 5-1/2 years is not going to pay any longer. I went to work a year ago and was able to keep up on the payments, however, my job ended and I cannot pay the payments. The principal has all been paid back to the bank but I am upside down on current value. I have someone who will buy it on a short sale (about 50% of what is owed) but the bank won't consider the offer and wants to repossess it if/when I no longer make the payments. At this time I am 5 days past the due date. If the bank takes it they will have to transport then sell at auction and will only get a few thousand dollars for it. They will then sue me for the difference which will, with costs, be approximately what I owe on the trailer now. I have a 1996 pickup, a mobile home on leased land as my only real assets. I am on a deed with my son on his house but I have no equity in it. (We did this because both of us are single and want the other not to have to go through probate, etc. if something were to happen to him). What can or should I do? I have an excellent credit rating and FICO score and hate to ruin those in the last years of my life, it is an honor thing. I just cannot have the bank take the trailer or place a lien om my residence nor have them involve my son's home. Should I transfer the ownership/title of the mobile home to one of my children (have tried to sell it and can't) or put it into a family trust. What other alternative can you suggest?
- Category: Debts and Credit
- Date:
- State: California
Answer:
Contact your creditor to discuss your situation and explore options for getting your payments back on track. Be honest about your circumstances, such as job loss, and express your willingness to pay. Ask if the creditor can modify your loan terms, like adding missed payments to the end of the loan. If you’re struggling to keep up with payments, reach out to your creditors immediately. Suggest solutions like a temporary reduction in payments, skipping a few payments and paying them off later, or waiving late fees.
If you need help negotiating, consider contacting a nonprofit debt counseling organization. You can find a list of agencies at the U.S. Trustee website, (select "Credit Counseling and Debtor Education"). Avoid paying anyone to "fix" your credit.
If you are far behind and can’t catch up, consider voluntarily surrendering the trailer before repossession. This can save you from additional costs. Discuss potential concessions with the lender, such as waiving the right to collect the remaining loan balance or not reporting the repossession to credit bureaus.
In a voluntary repossession, the lender may sell the trailer and seek to collect any remaining balance after the sale. They may also add costs for towing, repossession, and auction. If they obtain a judgment for these losses, they might place a lien on your assets or garnish wages (Fla. Stat. § 775.21).
Depending on your situation, consider these options:
- Loan Workout: This modifies your loan agreement, possibly including forbearance or deferment.
- Deed in Lieu of Foreclosure: You can voluntarily give the title to the lender to avoid foreclosure.
- Short Sale: The lender may allow you to sell the property for less than the mortgage amount.
- Short Payoff: The lender may accept a lower amount as full payment.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.