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Q:
My car was repossessed so why am I still liable for a car no longer in my possession?

I had a car repossessed in December. I recently received information in regard to a deficiency payment. Why am I still liable for a car that I no longer have in my possession? And how long do I have to wait before obtaining another car loan? Are there any laws specific to this subject? -MRL

MRL,

A “deficiency balance” is the difference between what the lender sold the car for and what you owe on the loan. Apparently, the lender auctioned off your car and the highest bidder did not pay enough to cover your loan amount. Even though you do not have the car any more, you will have to pay the balance or risk legal action. There are no specific laws, which I am aware of, to prevent your repossession or their attempt to collect the deficiency balance.

The repossession will remain on your credit report for up to seven years. If you do not pay the deficiency balance in a timely manner, this could negatively affect your credit report as well. Sorry, I realize this is not what you want to hear.

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