What are the chances of being sued for the deficiency on a motor vehicle after a voluntary repossession?

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What are the chances of being sued for the deficiency on a motor vehicle after a voluntary repossession?

Asked on January 8, 2013 under Bankruptcy Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

There is no way to answer this question in the abstract. The creditor has the right to sue a debtor for any deficiency remaining after a car is repossessed. Whether it will do so depends on 1) how much money is owed--someone is much more likely to sue for $10,000 than $1,000; 2) the creditor's belief as to whether the debtor has income or assets it can collect from--there's no point in suing if you don't think you'll get paid; and 3) even the lender's "corporate culture"--some companies will sue much more readily than others. The important thing to bear in mind that the debtor *could* be sued.

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Based upon my experience with automotive repossession (voluntary or involuntary) the chances of the person who lost the vehicle for being sued for a deficiency as to the vehicle itself is remote. Rather, the deficiency with the vehicle will impact the resale amount of the car at auction and will impact the deficiency action on the loan assuming the car sells for less than what is owed.


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