Some of my Senior Single friends purchase RV's on the "Thousand dollars down and twelve years to pay it off" plan.My question is, "What happens when they expire three years into the twelve year contract?"I am not posing a moral question, or judging their wisdom. I only wonder what is the mechanism that the lending institutions usually follow in this situation? I do not need to be told that the loan was stupid or that they should have paid cash. Just the reality of what is likely to happen. My hypothetical scenario includes no surviving spouse, adult children who have no use for a RV, and a relatively small estate.What happens when my camping buddy goes to that big campground in the sky before paying off his camper?

All the creditors stand in line for their share of the assets. If their are not enough assets to cover the loan the bank gets the RV back to sell to satisfy the remainder of the loan. Any surplus money from the sale goes back into the assets pool to the benefit of the other creditors. Anything remaining after all the creditors get their due goes to the heirs.If their isn't enough money to satisfy the loan, the creditor goes after the co-signers if any. Any life insurance proceeds also come into play. If overall there isn't enough money to cover the loan, the bank loses, which eventually means the bondholders (such as your 401K account) loses.

I have heard everything from, "They will get the money from the children and grandchildren" to "Leave the keys in the ignition and walk away". Again, I do not care about the morality, just the most likely procedure. Some of my camping buddies think that they get a one time pass on paying their debt while others say that bank will sell the RV for almost nothing and attach the estate for the difference.

I'd say the problem is for the heirs if any, not for the old codger. I'll see if I can buy a million dollar coach when I'm 99 for $1 down and $1 a week.bumpy

Almost always The children and grandchildren are not personally responsible to pay off the debt (unless they co-signed the loan). However, in general terms (with exceptions - trust also come into play here), any assets of the debtor will be seized (house, property, vehicles, bank accounts, 401-k's, etc.) to pay off the debts first, after all debts are settled, anything left can be inherited.

Any Bankers on here? | Good Sam Community

troubledwaters
Explorer III
Sep 19, 2017
Almost always The children and grandchildren are not personally responsible to pay off the debt (unless they co-signed the loan). However, in general terms (with exceptions - trust also come into play here), any assets of the debtor will be seized (house, property, vehicles, bank accounts, 401-k's, etc.) to pay off the debts first, after all debts are settled, anything left can be inherited.
Bumpyroad
Explorer
Sep 19, 2017
I'd say the problem is for the heirs if any, not for the old codger. I'll see if I can buy a million dollar coach when I'm 99 for $1 down and $1 a week.
bumpy
Moderator
Moderator
Sep 19, 2017
Moved from ATC
TomG2
Explorer
Sep 19, 2017
I have heard everything from, "They will get the money from the children and grandchildren" to "Leave the keys in the ignition and walk away". Again, I do not care about the morality, just the most likely procedure. Some of my camping buddies think that they get a one time pass on paying their debt while others say that bank will sell the RV for almost nothing and attach the estate for the difference.
troubledwaters
Explorer III
Sep 19, 2017
All the creditors stand in line for their share of the assets. If their are not enough assets to cover the loan the bank gets the RV back to sell to satisfy the remainder of the loan. Any surplus money from the sale goes back into the assets pool to the benefit of the other creditors. Anything remaining after all the creditors get their due goes to the heirs.

If their isn't enough money to satisfy the loan, the creditor goes after the co-signers if any. Any life insurance proceeds also come into play. If overall there isn't enough money to cover the loan, the bank loses, which eventually means the bondholders (such as your 401K account) loses.

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