We have a motor home that we purchased in 2005/2006 for about $237k. We owe $197k. We are just now late on our 1st payment because my husband is a framer and can’t find work in this economy and hasn’t for quite some time. We’ve eaten through savings and are selling off things to pay our mortgage and basically living off of credit cards and maybe a job a month now. I know, credit cards are a last resort but we have to eat and use gas to find work & get kids to school.
The bank suggested we short sell the motor home but we can’t seem to find a buyer. What do you suggest we do if we can’t find one? We will be 30 days late soon. Our credit is excellent(for the next week or 2 anyhow). I know we’ll take a hit but I don’t want to owe the $80k or so that will be left on the loan if they repo and sell at wholesale.
We have a 1st mortgage, no car payments, retirement savings of about $70k that I’d rather leave as a last resort.
Is bankruptcy an option with this high of debt? Would a repo be better? I don’t know what to do. 
If you don’t pay the monthly on the motorhome, your bank will order a reposession. When they sell it, you will continue to owe the difference between the $197k + legal fees, repo fees, and lawyer fees, minus what someone will pay. If they sell it for $100k, you will owe $100K plus to the lender. Yes you will take a hit on the credit report, but at this time you can’t worry about that.
When (and IF) you go into bankruptcy, the court will take your $70k savings right off the bat. Then they will see if you can afford to hang on to your house. They will probably take one of the cars and sell it too. You credit cards will be canceled by the MC or VISA companies. But your entire CC debt will probably disappear as long as you can prove you did not go on wild spending sprees during the last 90-120 days, and the bankruptcy will be on your credit report for 10 years. But—not the end of the world.
I suggest you continue in ernest to sell the motor home–cut the price before the bank does it their way. A repo is not as bad as a bankruptcy. Make a sever emergency budget: 1) food-and cut this down to rice and beans (cheap as you can)-only to be bought to cook at home (no fast foods, no restaraunts, no Starbuck Lattes), 2) heating and electrical, 3) mortgage, 4) gas for one car, and insurance for the same car—as long as you don’t drive two, you park the second, and take off the insurance.
If you can afford it keep one cell phone (land line is cheaper), cable goes, other electronics can go too. No more malls, no more going out for a while. If you can’t afford the credit card payments, tell them so, and although the collectors will harassess you, just remember your are only worried about your family, your home, and getting by. If that motor home is not gone in 30 days, think about cracking open the retirement fund, but that is not endless, as you know.
If you don’t pay the monthly on the motorhome, your bank will order a reposession. When they sell it, you will continue to owe the difference between the $197k + legal fees, repo fees, and lawyer fees, minus what someone will pay. If they sell it for $100k, you will owe $100K plus to the lender. Yes you will take a hit on the credit report, but at this time you can’t worry about that.
When (and IF) you go into bankruptcy, the court will take your $70k savings right off the bat. Then they will see if you can afford to hang on to your house. They will probably take one of the cars and sell it too. You credit cards will be canceled by the MC or VISA companies. But your entire CC debt will probably disappear as long as you can prove you did not go on wild spending sprees during the last 90-120 days, and the bankruptcy will be on your credit report for 10 years. But—not the end of the world.
I suggest you continue in ernest to sell the motor home–cut the price before the bank does it their way. A repo is not as bad as a bankruptcy. Make a sever emergency budget: 1) food-and cut this down to rice and beans (cheap as you can)-only to be bought to cook at home (no fast foods, no restaraunts, no Starbuck Lattes), 2) heating and electrical, 3) mortgage, 4) gas for one car, and insurance for the same car—as long as you don’t drive two, you park the second, and take off the insurance.
If you can afford it keep one cell phone (land line is cheaper), cable goes, other electronics can go too. No more malls, no more going out for a while. If you can’t afford the credit card payments, tell them so, and although the collectors will harassess you, just remember your are only worried about your family, your home, and getting by. If that motor home is not gone in 30 days, think about cracking open the retirement fund, but that is not endless, as you know.
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