Table of Contents
What states allow deficiency judgments?
State Deficiency Judgment Laws
| State | Most Common Type of Foreclosure | Are deficiency judgments allowed? |
|---|---|---|
| California | Nonjudicial | Not after a nonjudicial foreclosure. |
| Colorado | Nonjudicial | Yes. |
| Connecticut | Judicial | Yes. |
| Delaware | Judicial | Yes. |
Can you be sued for not paying a car loan?
If your car-loan lender repossesses your car, van, truck, SUV, or other motor vehicle, it might sue you to recover any money you still owe on the loan (called the “deficiency”). If a repossession happens, you’ll need to decide if it’s worth paying an attorney to help you.
Can I get my leased car back after repossession?
Often, a bank or repossession company will let you get your car back if you pay back the loan in full, along with all the repossession costs, before it’s sold at auction. You can sometimes reinstate the loan and work out a new payment plan, too.
What happens when a car is sold at auction?
When a repossessed car is sold at auction, your state’s laws list who receives the money from the sale, or the proceeds from the auction. Generally, the first thing paid is the cost of selling the car at the auction and the cost of car repossession.
Do you still owe money on a car when it is sold?
You still might owe the loan company some money. After the loan company sells the car at the auction, there often isn’t enough money to pay everything you owe on the car. This difference is the deficiency balance. This is an unsecured debt because it’s not attached to anything.
Do you still owe deficiency if car sells for$ 2, 000?
In this situation, the lender will still sell your car, but there will be a difference between what it sells for, and what you owe. This is called the deficiency. If your car sells for $2,000 but you owe $10,000, the deficiency, which you now owe personally, is $8,000.
What happens to my car after it is repossessed?
How your state treats the use of these devices could affect your rights. Contact your state attorney general if you have questions. After your vehicle is repossessed, your lender can either keep it to cover your debt or sell it. In some states, your lender has to let you know what will happen.