Auto Deficiency Balances

One of the biggest problems caused by  repossession of vehicles is that most consumers end up owing a large sum of money, called a deficiency of balances,  to the financial institution even though the consumer no longer owns the vehicle. When a car is repossessed, the lender will auction the vehicle and applies the amount received at auction to the loan balance. The former owner is responsible for the balance of the loan minus the amount received in the auction, which may leave the former owner, due to many thousands of dollars on a deficiency balance.

In almost all cases of non-governmental debts, including auto balance the deficit, a creditor must file a claim against the debtor and obtain a ruling before the debtor can be garnished wages. Furthermore, demand usually must be filed in the county where the debtor currently resides, where the debtor lived at the time the account was opened, or when the contract creating the debt was signed physically.
We encourage you to continue trying to work with the lender to negotiate repayment terms in this deficiency balance. We understand that the creditor has been reluctant to negotiate payments, but it is certainly useful for you to keep in touch with the creditor periodically to provide an affordable payment plan. Even if the creditor can not work with you in reasonable payments, you might want to settle the account for less than it really should, if you can save or borrow a lump sum to provide a settlement.