Need advice please....lawyers, bankers, etc?

Question

My parents used to run a business and made a great life for themselves, however, with the economy, their debt was so overwelming that they had to get their boat repossessed (approx $400,000). They decided that taking the hit on their credit was the best thing to do in their situation. 
Now, a friend of theirs said that because they did that, all of the other things they own (house, cars, etc) are going to get taken away to pay back the boat loan. I dont see how they could do that. Is that possible or is the credit hit the worst of the situation?

Dixie Darlin&#39; · Accepted Answer

The boat was repossessed, the creditor will sell the boat for whatever they can get out of it. The balance due on the loan is called a deficiency balance, and your parents will be responsible for that balance. 

The creditor has the right to sue your parents in court and if they win judgment, then it is possible for wages to be garnished (if your state law allows), levy bank accounts, place a lien on  personal property likes homes, cars, etc.  

It would be wise of your parents to try to work out a payment arrangement with the creditor for the balance.

Need advice please....lawyers, bankers, etc?

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