Need advice on how to sell or walk away from my boat

S

Sea Ray Anonymous

New Member
Jul 18, 2012
1
Long Island
Boat Info
310 Sundance 2000
Engines
T300HP Inboards
I own a 2000 Sea Ray 310 Sundancer.
I have a boat loan that owes ~$70K that due to the economy and a job change in salary that I can no longer afford.
A boat broker told me that these boats are selling in the $50K price range. Yacht World agrees though some are higher. So I'm definitely upside down on the loan. I dont have $20K to pay off the loan balance if it were to sell at $50K.
My wife doesn't was us to default on the loan, since it may ruin our credit ratings and hurt future potential job opportunities.
Is there any way out of this? Any recommendations?
 
Talk to your lender. Possibly they will let you sell it short, and continue to pay off the remaining 20k or so in installments. Of course, banks like to have collateral, but if you were using a local credit union, or have been a perfect customer for your bank, maybe it will help. It never hurts to ask. The bank would rather get 50k from the sale, and let you pay the difference than have to apsorb the full 70k if you walked away. This has been going on a bunch in the housing market.

My 2 cents.
Mike
 
Follow your wife's advice and protect your credit. As you alluded to, credit ratings are playing a bigger role in job opportunities. When I started consulting 15 years ago I was hired on a hand shake and a 1 page contract. Now it's a 10 page contract and a full background check, drug test and credit check...I see this more and more for full-time positions nowadays.

It's not completely unwarranted on the employers part but unfortunately some good people are affected. I know some very good people who fell on hard times over the past few years. They're not deadbeats and they're mostly back on track but they look bad on paper if you don't know the whole story...tough situation to be in. A computer crunches your numbers and rejects you before you have a chance to tell your story.
 
Sea Ray Anonymous said:
I own a 2000 Sea Ray 310 Sundancer.
I have a boat loan that owes ~$70K that due to the economy and a job change in salary that I can no longer afford.
A boat broker told me that these boats are selling in the $50K price range. Yacht World agrees though some are higher. So I'm definitely upside down on the loan. I dont have $20K to pay off the loan balance if it were to sell at $50K.
My wife doesn't was us to default on the loan, since it may ruin our credit ratings and hurt future potential job opportunities.
Is there any way out of this? Any recommendations?
Click to expand...


I bid on a boat (Chap 310) where the owner was in your situation. He had just not told the broker until after I put in the bid. And the broker told me - that since the owner had not missed any payments - the bank was not willing to negotiate at all. So I guess that means finding out a way to make your bank a little nervous without ruining your credit rating - then the bank might tell you to sell and agree to a payment plan for the remainder.

But it is not easy... and not nice to have to do. The best thing to do is create a budget 3 years forward and present that to the bank. And calculate how much you can pay them pr month. And do not forget a broker wants some of your money as well....

I feel for your troubles and hope for the best.
 
Mike is right - I think you need to start with the lender. I looked at buying a boat from a guy who was upside down and didn't want to pay the ofset amount. The boat has been for sale for a year, he is now further upside down and the depreciation rate was higher than the interest/principal ratio. Remember that you have to pay off the $20K in order to sell the boat in the first place.
 
kaz911 said:
I bid on a boat (Chap 310) where the owner was in your situation. He had just not told the broker until after I put in the bid. And the broker told me - that since the owner had not missed any payments - the bank was not willing to negotiate at all. So I guess that means finding out a way to make your bank a little nervous without ruining your credit rating - then the bank might tell you to sell and agree to a payment plan for the remainder.I feel for your troubles and hope for the best.
Click to expand...

On most short sales, the lender will require you to be late 3 months or more before they will even start to talk. This will no doubt kill your credit albeit a home short sale more than a boat/car. I would sit down and list all your payments (even power, water, insurance etc) and show pay stubs along with bank statements. Take this to the lender (or fax it) and show them that you cannot afford the boat any longer and see if they will work with you.
 
sfergson727 said:
I think the odds are that anyone whose boat "accidentally" sinks in today's economic enviroment will have the book thrown at them....How does jail time affect your credit score?
Click to expand...

Not sure about the credit score but I think it will definitely affect your job opportunities, unless it's a sheet metal shop stamping license plates.

On a serious note, several people I know went through this after black friday in the early 90's. The banks seem to be more forgiving, and quicker about it, when you fall prey to bad economic times. If the economy was strong and employment high, you would look worse. If you do end up defaulting now, I think people will be more understanding as many have suffered since the housing crash. Best of luck to you. I know it's no fun laying awake at night wondering how you can make ends meet.
 
The lender isn't likely to do much to help. They may refi at a longer term, but that is a long shot. They still have to follow regulations. If they go by the book, they will not refi for less than wholesale value, which means you have to come up with 20Gs to refi. You could sell and get a HELOC to cover the difference if you have equity in your home. Then pay it off when times are better. At least you'll be rid of the burden and the payments can be lower.
 
Correct me if I'm wrong...in a shortsale situation, if the lender forgives the additional 20K owed, you must pay income tax on that 20K (??)
 
rondds said:
Correct me if I'm wrong...in a shortsale situation, if the lender forgives the additional 20K owed, you must pay income tax on that 20K (??)
Click to expand...

Yep, that is a fact. Learned the hard way. You have no money to make payments so you get the bank to agree to a short sale. All good right? Then at the end of the year, they send you a 1099 from the lender for the amount they forgave. This is when you have no money or you wouldn't be in the situation in the first place. Real nice suprise. They also mention somewhere that for your convienence, they also sent a copy to the IRS. Very thoughtfull of them. Isn't it?

Bill
 
I hope the OP checks back in as there is, if nothing else, food for thought in the responses. I would like to think that he can somehow rid himself of what has to be a tremendous burden. Being upsidedown on a non esential is bad enough. Struggling to find the resources to even tread water has got to hurt.

I would like to think that that he could get a little creative and make it happen. Think positive for a minute. If the balance is 70k, payoff might be 67, the actual sale nets him 46, a HELOC gets him 12, 3k of credit card space, gets him to 6k, sell 600 dollars worth of boating stuff and that super dupper lawn tractor. Next thing you know it seems doable.

I know I generalized and over simplified, but break it down into smaller chunks & like I said it may just may be doable.
 
I bought my boat in April from a repo lot. The story that I got was the guy lost his business and decided to voluntarily turn his boat in to the bank to save his house. I don't know what was owed on it but I feel I got a pretty good deal, and the guy got rid of his burden.
 
Is there any option at all to let someone take over the payments for a period of time for complete possission of the boat....for a period of time?

In a perfect scenario someone would take over 80-90% of the monthly payment to have full access (like a lease) to the boat for 2 years. At the end of two years you get the boat back and will hopefully be on better financial footings to either outright sell on the open market or re-take possession. You would have to make up the difference of the going rate for the monthly payment and what you owe the bank each month, but it will help.
 
I like that line of thinking, a couple things pop into mind...

1. A serious lease contract would have to be in place to protect you from liability.
2. You are responsible for maintenance & repairs.... 14 months in he smokes one of the engines. Yikes!
3. Better not let your bank or insurance company find out about it.

The line of thought is good though. I wonder how expensive it would be for him to set up a "leasing company". Or if his market could even support it.
 
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