A deficiency judgment is action taken to collect the difference between the amount a delinquent borrower owes on a car loan and what the creditor who provided the car loan gets for reselling the car (often quickly at an auto auction) following its repossession. For example, if someone owed $4,500 on a car and the creditor sells it for $2,500, the amount of the deficiency (remaining balance owed) is $2,000. In most states, a creditor who has followed proper procedures for repossession and sale of a car can sue the delinquent borrower to obtain a deficiency judgment to collect the remaining balance owed.
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