Most Unique Boat Repo Situation

[BCA2009]

I was reading in another thread about a bank refusing to repo a jet ski and I thought I would share my current situation. It may be the winner of the most convoluted situation you have heard of. I wish I had a resolution, so any ideas are wecome.

I bought a 36' 30 year old sportfishing boat 3 years ago. I financed 26K for 12 years (I know, stupid!). It was a project boat from the start and I planned on putting several years of work and $$$ into and fix it up over time. Fast forward. Wife loses job, bad real estate investments, yada, yada, yada.

After I was discharged, the bank sent an agent to evaluate the boat. I called them two weeks later and they said they didn't want it. They have a 25K lien against it, but basically said it would cost them more to repo it and sell it, than they would get for.

So it is 100% mine to use as I please, BUT they said they would not release the lien AND they could potentially change their mind and exercise the lien at any point in the future.

So here is the delimma, the boat has to stay in the water (too big for a trailer). Wet slips are expensive ($300 and up per month). I can't sell it because I don't have clear title. If I spend any more money fixing it up, they could come get it and I would lose that money. It obviously still needs alot of work, although it will crank and run.

If it was just registered with the Florida DMV, there are state laws that let you claim abandoned boats and get a clear title. I could "abandone" it and let a friend claim it.

But my boat is a documented vessel with the U.S. Coast Guard and the lien is filed with them. There is no way to get the lien released except by the Bank or a court order from a Federal Court that has jurisdiction over the coast guard in Florida. FYI, this is also the reason, why they are not repo'ing it. To repo a documented vessel, they have to file a court proceeding with the federal court to have the boat "arrested". It would cost them at least 2K, probably more.

In my discussion with the banks law firm, I asked what I was supposed to do with it. She said "Anything you want, It's your boat!" Except transfer a clear title. So I told her the truth, that my best soulution was to have it pulled out of the water and have it demo'd and taken to a landfill. She said, "That's fine, it's your boat."

So, I ask, why they won't give me title (for a nominal fee). She said "they reserve the right to repo it at a later time.

I reminded her that 30 seconds ago I said that without the title I was going to take it to a landfill. She said I had that right and they obvioulsy couldn't repo something I no longer had, but I couldn't get the title without paying the full balance.

Two days later I get an unsolicited call from them (the law firm that handles the bank's BK's). They offer to let me have the title for 75% of the loan value. I told them no thanks.

I might be able to sue and either force them to take it or get them to give me a lien release, but it would have to be in federal court and I would have to use an attorney that practices maritime law. It would not be worth it.

I'm not willing to spend more than about $500 to get the title. I may be able to sell some parts off of it to offset the cost of getting it to the landfill. That will cost $1,000 or more.

I will wait a few weeks and call the bank directly (try to bypass the law firm) and try one more time to get the lien reased for a few hundred dollars. But I'm not holding my breathe.

Any ideas or solutions are appreciated.

[tay666]

So, since they will not give you the title, it really isn't yours.
Basically, you are storing their property.
I would start sending them bills for storage fees.
If they don't pay, take them to small claims court.

Might force them to do something.

[StartingOver08]

I am going to look to see if there is such a thing as a motion to compel the lender to repo the property. Since you "surrendered" it in your BK and the lender still has the lien and will not release the lien, there must be something in the law that they have to follow thru with their repo. Maybe justbroke or HHM can jump in before I find it...

[BCA2009]

So, since they will not give you the title, it really isn't yours.
Basically, you are storing their property.
I would start sending them bills for storage fees.
If they don't pay, take them to small claims court.

Might force them to do something.

Actually, it is 100% my property, just like a home with a deed. I have no fudiciary responsibility to take care of it or insure it. They have a lien against my property, They can exercise that lien, but until they do, it is mine to do with as I please. I can paint it, use it, rent it out, or sink it. I just can't sell it. To make it really usable for fishing, I would need to put at least 5K or more into it. It needs new fuel tanks (3K +) and electroncis(??), It needs lots of cosmetics. It's a shame though, because the hull is very solid and with a little work, the engines should run a long time.

I could probably fix it up and they would never pursue, but first of all I don't have the money now, and second i don't want to take the risk that they will review their files 5 years from now and follow up on it.


I looked into the putting it at a friends house and letting him charge storage fees, then let him try to sell it under the "mechanics lien laws". But on a Coast Guard documented vessel, the first lien survives all sells, so if someone did buy it at auction, they would still be subject to the original lien.

Only a federal court order can void the lien. These rules are in place because alot of documented vessels travel to various states and countries. This prevents them from being subject to various state laws and keeps the rules consolidaed under federal control.

[BCA2009]

I am going to look to see if there is such a thing as a motion to compel the lender to repo the property. Since you "surrendered" it in your BK and the lender still has the lien and will not release the lien, there must be something in the law that they have to follow thru with their repo. Maybe justbroke or HHM can jump in before I find it...

I would love for one of you guys to find a law or loophole that I could use, i'll research anything you come up with. But I've looked into and so far haven't had any success.

Yes I elected to "surrender", but just like on a home, the boat basically has to be foreclosed on. And just like the cost/ benefit analysis that banks do and decide to wait years (theoretically never) to foreclose when a house is under water. The bank can decide to postpone foreclosing on a boat. I can't just drop it off in their parking lot. It weighs 28,000 lbs and the bank is 1,000 miles away.

I think I have a logical argument that without proper maintenance, the boat could be an environmental hazrd (sinking), but I don't know of any case law to actually support forcing them to release the lien for this reason. An I don't want to spend the money trying the court option unless i pretty much was guaranteed success. And I'm still not willing to spend very much even if I could succeed. I'm afraid the cheapest way out is the landfill. Like i said, I could part it out and probably pay the cost of crushing it, but I just hate to do that if I can come up with an alternative.

I appreciate any research and recommedations anyone has.

Just looking at it, you would say, "Oh yeah that's worth a few thousand, at least!" And it could be a great boat, but the maintenace, storage and insurance on a boat this size could easily be 6K aor more. So even though it appears to have some value, when you look at overall costs to keep it up, it has no value in this market. Just like homes, a few years ago it appraised for what I bought it for, but you can no longer borrow money on these types of vessels and people with enough cash to buy and fix it up are few and far between. So the bank doesn't want to put any more money into the situation.

Thanks for the comments.

[catleg]

I'm thinking, do your best to remove any linkage between yourself and the boat, then drive it out into the Gulf Stream and abandon it. See how far she goes. Wait for the "ghost ship" stories to appear on the news. In fact, leave some food on the table and make it look like that movie "Overboard" happened in real life.

[BCA2009]

Good Idea!. I have seriously considered sinking it to make a artificial fishing reef. But getting permits for that is a pain and it has to be inspected. No oil or lead paint can be on/in the hull. I could probably get away with doing it without a permit (i would remove all fuel and oil), but the risk of fines are not worth it.

I am going to wait a week or two and make a final run at the bank.

After learning what I have about this situation, i'm no longer surprised there are so many abandoned boats in Florida waterways. Lots of people grind off serial numbers and just anchor them somewhere and walk away. They eventually sink and it becomes the State's problem. I would never do that. I have too much respect for the environment. If i have to pay to have it crushed, I will. The engines are 20 years old, but I will try to sell them for enough to pay for crushing it. It's just a shame. I could give it to someone that would spend some time and money to make it a decent boat. But I need a clear title to do that.

[doudis2]

Maybe you could donate it to the folks working on the gulf oil spill. Maybe they would have a use for it???

[BCA2009]

Maybe you could donate it to the folks working on the gulf oil spill. Maybe they would have a use for it???

Doesn't have all of the safety equipment. More importantly, just like a house as long it is my name, I have liability for it. If it wasn't for that, i would give it away and let somebody else play with it. But if they ran over somebody or it sank, I would ultimately be responsible. So, I can't get rid of it unless I can transfer the title. At least I haven't figured out a way yet.

Thanks for the suggestion anyway. Keep em' coming,.

[Bell30656]

I have a conversion van that is in the same situation. The finance company elected to not repossess it but won't give me the title. However, since it is currently plated I can drive it with the fear that one day they'll change their mind or sell the title to a junk debt buyer.

Boats are pretty hard to find. It's not like a car where the registration gives the address it will be parked at.

[BCA2009]

I have a conversion van that is in the same situation. The finance company elected to not repossess it but won't give me the title. However, since it is currently plated I can drive it with the fear that one day they'll change their mind or sell the title to a junk debt buyer.

Boats are pretty hard to find. It's not like a car where the registration gives the address it will be parked at.

True, but if they decideded they wanted it, they could probably do a little investigative work and find it here locally. Not that I care. If I had a place in different city to keep it. They could never find it. But wet slips are expensive everwhere.

It will never be worth their effort unless I were to fix it up some.