UPSIDE DOWN ON RV NEED HELP/ADVICE

RSTING69

New Member
Joined
Apr 30, 2020
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1
Hello to all, I am new to this forum and I am reaching out to my fellow campers for help/advice on a problem my wife and I have.  There is a backstory that we want to share so that everyone understands our situation and I know many may say that we really messed up and didn't think things through but we really stepped out of our comfort zone for some life changes.

We have owned 2 previous travel trailers and absolutely love, love, love camping.  In 2018 we traded our old travel trailer in for a slightly larger unit with 1 slide.  Immediately after this opportunity knocked on our door and I had a tremendous opportunity taking a new job out of state.  This was way out of both of our comfort zones and we never imagined living anywhere but where we grew up.  So, in early 2018 we made the decision to move to Tennessee and our master plan was to live in our travel trailer until we found a home both of us loved.  My wife was still living in our home in Illinois waiting for the opportunity to transfer to Nashville area with her company while I lived in our travel trailer in Tennessee.  About 1 month into this our travel trailer had sprung a number of leaks and we had come to find out the floor and understorage area was rotted and full of mold.  Fortunately the RV Dealer in Illinois had agreed to buy the RV back from us, but had unfortunately sold our RV we had traded in. 

We spent the next several weeks living in a hotel while shopping for an RV here in Tennessee.  Our master plan was to stay in our RV for 2 years to save some money and buy a home we really loved.  We ended up going with a 5th wheel camper, which we had delivered to the RV park we were staying in.  We did not have a truck at the time big enough to pull it, but again, our master plan was to trade in our truck for a larger vehicle and in the mean time we had friends that were able to move the RV for us whenever necessary.  So bad decision 1 was buying an RV we couldn't even pull, remember, we are thinking big picture at the time...  I know some of you are already shaking your head but we had delusions of grandure at the time.

Mistake no. 2.  About 3 months into our new RV 5th wheel living we had just toyed with starting to look at houses, not being serious but we wanted to get a feel for the market.  The market was very fast here and we ended up befriending a fellow camper who was also a financial officer for an institution here.  He had talked to us about our journey and recommended we consolidate some of our debt so when we start looking less debt shows up on our credit and will make it easier for us to secure a mortgage.  So, we had actually called our bank about refinancing our RV loan as our rate through the RV dealership, in our opinion, was terrible.  We were talking to our bank back home and they were like "Hey, your RV is actually worth $65,000 original retail value, do you have any debt you want to consolidate in on this, nows the perfect time at 4.9%!!"  We bought the RV for 28,000 so we were like wow that sounds like the perfect plan.  My gut had told me at the time not to do it, something just didn't feel right but the more me and the wife talked she was burdened by our debt we had and saw this as an opportunity to get out from under it.  So we made mistake no. 2 and consolidated our debt into our RV refinance.  Yes I know, the hole is getting deeper and deeper.

Mistake no. 3  I know some of you are just holding your hands to your head right now and screaming NOOO!  Our first winter was rough, although it doesn't get terrible cold here, our water lines in the RV park froze a few times, walking to the showers every morning in 30 degree weather was getting old, its different when your on vacation as you know its only temporary and its like an adventure.  We ended up becoming great friends with the RV park owners and their daughter was a realtor.  We had been talking about our plan and she had offered to help us find a home.  So to keep this part short, we had looked about at least 10-15 homes we lost track, everyone one of them was on the market less than 5 days before selling.  We finally came across one that we both absolutely loved and had to have and we made an offer fully expecting it to be either rejected or outbid.  To our extreme surprise, our offer was first and it was accepted.  Panic mode now set in, we completely tossed our master plan right out the window and went rogue.  I think we were just exhasperated with our current situation and just totally disregarded what we both had planned on doing.  So we made mistake No. 3 and threw our original plan out the window and moved into our home.

NOW I NEED HELP AND SOME ADVICE.  So nearly 2 years later, we have a 5th wheel RV we have nothing to pull with that sits in storage, we are completely upside down on the loan and will end up having to take out a secondary loan to cover the remaining balance, and we have had maybe 3 bites on the RV in the last 5 months with only one looker.  I know things are extra hard right now with the COVID 19 issues but we are in desperation and are just looking for some help/advice on what to do to get rid of this RV.  it has become a huge reminder of our mistakes in the last 2 years and a burden we cannot even enjoy.  We have posted in on RVT, Facebook, Craigslist, and even went to see about consignment, but the issue is the lean on the RV.  Oh and here is the kicker, when we refinanced our RV loan the original financial institution signed the Title and sent it directly to us, not the new Financial institution, who by chance, thinks they have the Title, but we have it at this point. 

We know we made some huge mistakes but any help or advice anyone has on how we can get rid of our 5th wheel and hopefully at some point find a nice travel trailer we can acutally use would be awesome.  Thank you all so much for listening to my long story and if nothing else I hope it was at least entertaining if not educational on what NOT to do...
 
There is no magic solution to being upside down. You need to arrange for a personal loan that will be sufficient to pay off the balance on the RV above whatever you can sell it for and whatever other moneys you may have.  When you find a buyer and settle on a price, activate the personal loan and, together with the buyers purchase amount, pay off the RV loan. The monthly payment you previously paid on the RV now goes to pay off the personal loan.


If you cannot swing that, your other choice is filing bankruptcy and turning the RV into the bank that holds the loan.  There are different types of bankruptcy and one of them is intended for situations where you have one large problem debt that overshadows your other, untroubled finances.  It doesn't necessarily have to be disastrous to your credit and other loans - often you can recover in about two years.  Consult a bankruptcy professional to learn what can be done in your situation.

If you got no nibbles on your sale attempt, you are probably asking to high a price. Sellers are always shocked at how little their RV is actually worth in cash and the declining market makes it even worse.
 
My only advice is to sell it for whatever you can get, the longer you keep it the more it depreciates and the more it is costing you.  Also forget about buying another travel trailer until you get things sorted out a bit, and things stabilize.
 
No doubt a tough situation for you, compounded by what we all are dealing with in the Covid19.  As for advice to help you out, all I can say is Gary beat me to what I would have suggested, so take this reply as a second to the sound advice Gary has mentioned. Best of luck to you.
 
One other thing you may wish to do is to call your lender and tell them that you are considering filing for bankruptcy, and see if they would accept a negotiated settlement amount for whatever you can sell it for.  Lenders really don't want to end up owning RV's if you default on your loan, and will often settle for a cash payment for a fraction of the loan amount, if they think their other option is being stuck with an RV they then have to sell themselves.  Best of all this settlement would not hit your credit rating the way a bankruptcy would. 
 
RSTING69 said:
Our master plan was to stay in our RV for 2 years to save some money

That's actually mistake number one.  I've never owned a more expensive temporary accommodation in my life.

your RV is actually worth $65,000 ... We bought the RV for 28,000

So you're not really upside down on the trailer, you're overextended on the loan in it's name.  If you got face value for it today that still doesn't completely solve your problem.  You need 2x that to retire the loan.  Maybe you have enough for the other half, I don't know.

we made mistake No. 3 and threw our original plan out the window and moved into our home.

What happened to the home in IL?  Any equity there?  And you got into another house in TN?  You couldn't have gotten a mortgage with too a high debt to income so even if it's "credit" or a "loan" the RV balance due didn't seem to impact your ability to get a mortgage. 

From just what you've initially said here it sounds more like you are having issues servicing the commitments you have in total.  The trailer may be a part of it but it's not all of it.  We don't know your whole story but it would seem there's more to it than just trying to get out from under a trailer payment.  Maybe it's the easiest way out contrasted to other issues.  Generally I would say to do whatever it takes including selling a car or other property, getting a 2nd job, borrow money from a relative, loan against a security, on and on.  Right now isn't the greatest time to do any of these but you've got nothing else to do but try.  If you've really got 50K at 5% interest maybe one of your other more expensive debts is the one to target instead, to optimize the payment capital you have.  The last thing a finance company wants to do is inherit property so see what they have to say about making deferred or reduced payments, on the trailer and any other debt you have.  You're not a alone, a lot of people are having to make hard choices right now.  It's easy to say to just declare bankruptcy or default on the loan but that's not a quick or easy process in itself, and that albatross is with you a long time.  I'd rather be miserable for the next 6 months slogging through it until something breaks free than stuck with collections or a bankruptcy for 7 years plus the time after that it takes to climb out of the hole. 

So my advice is despite the current economy, suck it up and work through it.  One day at a time and never stop looking for opportunities of relief in terms of increasing income and deferring and reducing debt.  Been there, done it and have the receipts to prove it.

Mark B.
Albuquerque, NM
 
RSTING69 - First, Thanks for owning up to your decisions.  This is a big first step that many people aren't willing to take.  Secondly, could I propose that you don't have an RV problem, you have a financial discipline problem. 

You went to an RV forum trying to get out from an upside down RV which seems to make sense.  I would offer that you google Dave Ramsey and try his "baby steps" to get out of debt.  The RV is merely a symptom of the mistakes you outlined.  Even if you magically took the RV away you still aren't in the habit of good money management. 

Good money management will get you out of this situation and on the path too much better financial situation.  Unfortunately, this isn't taught in schools even when it is brought up in conversation many people will say things like "Some people realize life is more than about money".  So I would propose that good money management is actively discouraged. 

You recognize your situation and are owning your mistakes - Congratulations.  Now start some "baby steps" at Dave Ramsey and you will dig yourself out of this mess.  BTW, declaring bankruptcy is also just a bandaid.  You MUST learn good money management. 

Another resource is Kahn Academy.ORG.  Dont go to the .com.  Look for the personal finance section.

Good luck and I know you can turn this around!!  You have income and the willingness.  I am routing for you!

Oh and you dont need an RV Forum.  You need a financial forum.  Copy and paste your situation into Bogleheads.com and hold on for some well thought out financial advice.  The people there have spent years putting their financial lives in order so they aren't going to have a quick fix for you but they will have great advice.

By trying to sell the RV for more than its worth you are just trying to pass your mistakes onto someone else.  Not likely in today's market.

Feel free to DM me if you feel I can be of service in any other way - You CAN do this!!
 
I echo KandT's comments. Your first step is to realize the "what" (the problem) which you have done... debt, part of which is the depreciating RV. The second is to recognize the "why" (what caused the problem) which you are starting to figure out here. It does seem to be that spending habits in various situations, some desperate and some not, are a substantial factor here. So that will need to change long term, or you'll find yourself right back in this situation in 10 years if/when life throws you a few more curve balls. That's not a judgment toward you, as many of us have done much worse at some point! ;) But now that we have the problem identified, let's set a workable plan and start plugging away for the next few years to get this debt off the books... for good. Debt consolidation often sounds tempting, but all that does it move the debt around. Interest rates and payback terms are rarely what keep people in debt, so changing those around doesn't do much either. Hard work and dedication toward the end goal are what will eventually solve this problem.

I also cannot recommend Dave Ramsey enough -- his financial management program has changed our lives forever. His daily podcast and/or YouTube videos are great quick resources, and he's really an entertaining guy (not "boring" financial stuff) with a lot of great information to share on making wise decisions with money. Your situation sounds like a lot of other call-in guests I've heard, so I think you'd be able to relate to the content he covers.
 
Ditto on the Dave Ramsey recommendation.  We did that many years ago and it has been a life changer.  We've been debt free for many years now and we encourage our children to do the same.  Ironically we purchased our Class A from a local guy who purchases foreclosed RVs - it is a very common problem to be underwater at the worst possible time - unfortunately. 

KandT said:
RSTING69 - First, Thanks for owning up to your decisions.  This is a big first step that many people aren't willing to take.  Secondly, could I propose that you don't have an RV problem, you have a financial discipline problem. 

You went to an RV forum trying to get out from an upside down RV which seems to make sense.  I would offer that you google Dave Ramsey and try his "baby steps" to get out of debt.  The RV is merely a symptom of the mistakes you outlined.  Even if you magically took the RV away you still aren't in the habit of good money management. 

Good money management will get you out of this situation and on the path too much better financial situation.  Unfortunately, this isn't taught in schools even when it is brought up in conversation many people will say things like "Some people realize life is more than about money".  So I would propose that good money management is actively discouraged. 

You recognize your situation and are owning your mistakes - Congratulations.  Now start some "baby steps" at Dave Ramsey and you will dig yourself out of this mess.  BTW, declaring bankruptcy is also just a bandaid.  You MUST learn good money management. 

Another resource is Kahn Academy.ORG.  Dont go to the .com.  Look for the personal finance section.

Good luck and I know you can turn this around!!  You have income and the willingness.  I am routing for you!

Oh and you dont need an RV Forum.  You need a financial forum.  Copy and paste your situation into Bogleheads.com and hold on for some well thought out financial advice.  The people there have spent years putting their financial lives in order so they aren't going to have a quick fix for you but they will have great advice.

By trying to sell the RV for more than its worth you are just trying to pass your mistakes onto someone else.  Not likely in today's market.

Feel free to DM me if you feel I can be of service in any other way - You CAN do this!!
 
Lets just hope the housing market doesn't drop 25 percent or something crazy. That will leave a lot of people paying mortgages for far more than the houses are worth. Adding that on top of already bad finances will cause a lot of people to walk away from their debts. Its going to be a rough ride coming up shortly.
 
Guys maybe we need to stop replying.  The OP has not replied since starting this topic 5 days ago, and only has 1 post on the forum
 
This is still a fairly common topic when it comes to how RVs and financing can go wrong, so it's a valuable discussion to have.
 
I want to know what happened to the 30k plus they got when they refinanced the trailer :( Hopfully they paid off lots of credit card. At Least they got a house to live in.
 
scottydl said:
This is still a fairly common topic when it comes to how RVs and financing can go wrong, so it's a valuable discussion to have.

Perhaps, though specifics of each case differ, and while general advice may be the same, details may also differ.
 

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