Car Repossession (Deficiency) Lawsuits

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Repossession lawsuits, also called “deficiency” actions, are a common occurrence. They happen when your car is repossessed and sold for less than the amount of debt you owe. For example, if you owe $7,000, and your car is sold for $5,000, your lender may sue you for the $2,000 difference.

Many consumers think their debt is extinguished by a repossession. Unfortunately, that belief often is incorrect. There are various auto finance companies that sue consumers in Pennsylvania, including Americredit FinancialAlly Financial, Troy Capital, AutovestNew City Funding, and TD Auto Finance.

Nevertheless, there are many defenses and counterclaims potentially available in repossession actions. If any apply to your case, BCJ Law may be able to win or get you a positive monetary recovery. Call us at 1-800-997-5561 or complete our contact form.

Did your lender repossess your car properly?

In Pennsylvania, a lender can seek a deficiency after repossession only if your car was repossessed lawfully. The following are necessary for a proper repossession:

  • The lender must have a valid security interest, i.e., it must be able to take your car if you miss payments.
  • You failed to make payments and that failure wasn't excused by the lender or by law.
  • The lender must not breach the peace, i.e., it can't threaten you, use violence, or repossess over your objections.

If your car is repossessed improperly you may have a defense to a repossession lawsuit. You also could have claims for damages under state or federal law.

Did your lender sell your car properly?

In addition to properly repossessing your car, Pennsylvania law requires lenders to properly sell your car. The following are necessary for a proper sale:

  • Notice immediately following repossession.
  • Notice of sale within a reasonable time before sale.
  • A demand letter seeking a deficiency sent after sale.
  • The sale must be commercially reasonable.
  • The sale must occur within a certain time after repossession.
  • You can redeem your vehicle, i.e., pay what you owe and get your car back, for a certain time period.
  • You can remove personal property from your car.

If your car is sold improperly, you may have a defense to a repossession lawsuit. You also could have claims for damages under state or federal law.

Other possible defenses.

In addition to the potential defenses identified above, there are various other defenses available to individuals facing deficiency actions in Pennsylvania. For example, if a lender sues you too long after you made your last payment, you may be able to win. Likewise, if a lender said it would accept your car as payment in full, it can’t sue you after the fact. Ultimately, deciding what defenses (if any) are applicable is a fact-intensive determination.

Hire BCJ Law to help!

If you are sued after your car got repossessed, please contact us to see if we can help. We may be able to win your debt collection lawsuit or get it dismissed. You also may have legal claims or defenses to assert, which may lead to monetary recovery. Please fill out our free case review form or call us at 1-800-997-5561.

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