Thinking about surrendering RV

[greenthinker]

We are in a confirmed Ch. 13 paying back 100% to our unsecured creditors. We just found out that our camping trailer has sustained about $3000 in damage due to a water leak. We don't have $3000 to fix it, our insurance won't cover the repairs, and it's no longer under warranty (we've had it for about 4 years). We don't have $3000 to fix it, and there are other warning signs about the quality of the construction that make us think there could be more expensive repairs to come. So, we're thinking about just surrendering it to the lender. The trailer payments are made outside the plan, so I'm thinking that a plan modification would not be required to surrender it. Is that correct? If there is a deficiency after we surrender it, would the lender be able to submit a claim, even though the claims bar date is long gone? Are there any other considerations?

Thanks much!

[toojerm]

Yes, the deficiency will be added to the plan, but not necessarily immediately. I surrendered a truck upon filing, but they didn't come get it for ten months. It wasn't until my half way audit where the $19,000 difference between what it sold for at auction, and what I owed was added into the paln. My plan was adjusted up by $791 per month through the 60 month point.

[despritfreya]

Yes, you should modify the Plan to show the surrender of the RV.

Section 1328(a)(1) provides for the discharge of debt except as provided under 1322(b)(5). 1322(b)(5) states that the plan may provide for maintaining of payments on a secured claim (outside the plan) if the last payment on the contract falls due after the last scheduled plan payment.

This means, if the Order Confirming the Plan provided for normal monthly payments to the RV creditor and, under the contract, the last payment falls due after you complete your plan, unless you change the Order Confirming you can be liable for the deficiency. You should modify the Plan to show the surrender of the RV. I also expect you will have to do a new budget so, unless your income has dropped or your living expenses have increased, your plan payment may be adjusted to capture the amount of the RV payment that you are no longer making.

Now, if you were a 100% plan due to your whish to keep something that was not necessary (the RV), maybe the percentage payback can be adjusted.

You need to discuss your options with your attny.

Des.

[Pandora]

Before you surrender the RV (if you really use it and want to keep it)... are you sure you cannot fix it yourself?

Right before we filed (a few months prior) our 2006 RV had massive water damage due to a faulty window seal placement from the manufacturer. Even with insurance, they wouldnt cover it - so we repaired it ourselves. Of course, we owned the RV outright, but....we still saved thousands of $ by doing the repairs ourselves. We replaced 8 ft of subfloor, plus flooring itself, installed new insulation, beefed up everything in the main floor structure - plus replaced the entire lower wall section below the large front window; reinstalled the window itself using Eternabond -and sealed the entire thing with Proflex. I believe the most expensive thing was the Eternabond itself. What would have cost us upwards of $5-7K - we did ourselves for just shy of $1K (and not all spent at once).

With that being said - if its damaged, the lender may not even want it back. They do lose their value so quickly vs. what we paid for them brand new. :o/ Our trustee after seeing the damage only valued ours at around $3K I think, even though it looked brand new after our work on it.

[greenthinker]

Des,

Thank you for your feedback, and that totally makes sense. After thinking about it some more, we are going to keep it and get the water leak issues fixed. The problem is fixable, so we just need to go about it the cheapest way possible.

Pandora,

Thanks for sharing your experience with your RV…that really helps! We do use it often, and want to keep it. In fact, just last night we had concluded that we will do the work ourselves, so your information is very encouraging.

Take care!