First of all, it will negatively impact your credit and you will have a foreclosure on your credit rating. This will stay on your credit for a minimum of three years and make it virtually impossible for you to get a loan during that time frame.
Second, you should be responsible. You can’t afford to pay your bills, you can at least come clean with the bank. Tell them in advance that you’re going to be having difficulty making your payment. See if you can work out a payment restructure program, or else just sell the RV. Even if you sell the RV for slightly less than market value, it is still going to bring in a lot more money than it would if it sold at an RV auction. If you have to sell the RV for less money than you oh, it is still worth it in most cases. You can do this by getting an unsecured loan to pay off the balance. This amount will be a lot less than you would owe if you went into default on the RV.
Thirdly, if the bank repossesses your RV when you have to go through RV foreclosure it is not only a very difficult process, but it is also possible that the bank will come after you for the difference or the amount money that they lost on the bank repo rv. By the contract of the loan, you are required to pay them back every penny of principle that you borrowed with interest and fees. A lot of times the bank won’t come after the person, especially if they don’t have any money, but if it is a large sum, and they think they can get some of their money back, then they might just do it. Again, by showing your RV as soon as you notice that you are going to have difficulty making your payment, you’re going to be a lot better off in the future.
The fourth reason, is because even if the bank doesn’t come after you for the loss, the IRS can. Yes, sometimes the bank will avoid coming after you by getting them to sign a paper that states that you are responsible for loss. This way the bank gets a tax write off, but you have to pay the taxes on the money that the bank would have made if they would have collected your payments. If you are already a low tax bracket, or are you sticking money back from your taxes, then this is not going to be a big deal. But if you make a lot, it might put you over the edge and the June inning of their tax bracket altogether.
The fifth reason why you want to avoid going through RV foreclosure, is that RV foreclosures can put you under a huge emotional burden and stress. You can put a strain on your marriage, and even make you feel awful. It is worth a lot just to not have to go through RV foreclosure and be under a lot of duress.