What is a deficiency judgement?
After repossessing your car in California, the auto finance company is required to send you a letter, called a Notice. If you have received a letter from your Finance Company following a repossession, fax it to us at 858/270-7710, along with your phone number, and we will review it at no charge.
That letter, called a NOTICE OF INTENT TO DISPOSE OF VEHICLE, or a NOTICE OF OUR PLAN TO SELL YOUR PROPERTY (your vehicle) is very important. It may determine whether the repossession was legal and whether you owe any money to the Finance Company.
A deficiency is the difference between what is owed on the vehicle and what the lender sells it for. Usually the vehicle is wholesaled at an auction and the buyer may be subject to a lawsuit for the balance. The Automobile Sales Finance Act governs the process. It requires the lender to follow a very specific procedure to pursue a deficiency judgment. If the lender fails to follow the statute, the consumer does not owe the money. Save all your documents, including your original purchase documents. Do not throw any of your papers away. If you no longer have the Notice from the Finance Company, or they did not send it to you, send them a letter and ask them to fax or mail you a copy. The finance company has to comply with the repossession law. If they do not, they may have committed "conversion" by selling your car, and they may be liable to you.
The deficiency judgment is the result of a lawsuit. If you get served with legal papers you should immediately contact a lawyer. You will have only 30 days in which to file an answer. If you do not file an answer the court will assume that you have no defenses and you will lose by default. The result maybe that you end up with a default judgment saying a large sum of money that you really do not owe. The repossession and the deficiency judgment will go on your credit report making it difficult to buy another car, get credit, rent an apartment, even get a job. Many employers check credit reports before hiring.
The sale of the car has to be "commercially reasonable". That means that if they don’t conduct a fair sale, then they cannot hold you responsible for the deficiency.
Many lenders sue and get deficiency judgements that they are not entitled to. To find out if this is what is happening to you, call us.