Skip to main content
Search
Azcourts.gov
Arizona Judicial Branch
Search
twitter
facebook
Home
AZ Courts
AZ Courts Locator
Court of Appeals
Division I
Division II
Superior Court
Justice Courts
City Courts
News & Info
Our Courts AZ
Guide to AZ Courts
Committees & Commissions
Meetings Calendar
Jury Service
Strategic Agenda
eFiling
eAccess
Digital Evidence
Judicial Performance Review
Court Filing Fees
Supreme Court Language Access Plan
Access to Justice AZ
AZ Supreme Court
Meet the Justices
Clerk of Court
Rules
Court Rules
Pending Rules
Rules Forum
Orders
Administrative Orders
2023 Orders
Pro-Tempore Orders
Administrative Directives
Code of Judicial Administration
Live & Archived Video
Opinions
Cases Before the Court
Case Summaries
Oral Arguments Calendar
Law Clerkships
Court Admin/AOC
Executive Office
Administrative Services
Adult Probation Services
Certification & Licensing
Court Services
Dependent Children's Services
Education Services
Information Technology
Juvenile Justice Services
Emergency Preparedness
Procurement
Performance Measures
Committees & Commissions
Meetings Calendar
Judicial Branch Awards
Self-Service
Self-Service Center
El Centro de Autoservicio
Case Search
eAccess
Make a Payment
Fee Waiver and Deferral
CASA- Advocates for Children
Civil Law
Criminal Law
Criminal Code Sentencing Chart
Domestic Violence Info
Family Law
Child Support Calculator
Foster Care Review Board (FCRB)
Jury Service
Juvenile Law
Restore Firearm Rights
Resources for Interpreters
Seniors & Probate Law
Tax Law
Traffic Law
Defensive Driving Schools
Crime Victims' Center
Supreme Court Language Access Plan
Licensing & Regulation
File a Complaint
Alternative Business Structure
Attorney Admissions
Attorney Discipline
Attorney Regulation Advisory Committee
Certified Reporters Program
Confidential Intermediary Program
Defensive Driving Schools
Ethics Advisory Committee
Fiduciary Licensing Program
Judicial Conduct & Ethics
Legal Document Preparers
Legal Paraprofessional
Presiding Disciplinary Judge
Private Process Server
News, Data & Publications
News Releases
Media Inquiries
Strategic Agenda
Annual Reports
Performance Measures
Statistics
Legislative Updates
Home
>
Self-Service Center
>
Consumer Debt
Auto Repossessions, Deficiency, and Debt Buyers
When you purchased your vehicle, you probably had financing to pay for it and agreed to make monthly payments for a predetermined amount of time. This is an example of a secured, non-revolving debt. If you fail to make your car payments or default on your auto loan, the lender may repossess the car. However, even though your car has been repossessed, you are still responsible for the balance on your loan.
Below is information that may be helpful if a creditor files a lawsuit against you, but it is not a substitute for legal advice. There are other rules and laws that may apply to your situation, but these are common rules and laws that apply in civil cases.
Deficiency
If you receive papers from court notifying you a civil lawsuit has been filed against you
after
your vehicle has been repossessed, it may be because you still owe a balance on the car loan.
For example, let's say you owe $10,000 on the loan when the car is repossessed. If the creditor resells it for $5,000, you will still owe $5,000 on the loan. You are being sued for the
deficiency on the loan
. The deficiency amount is the difference between (1) the amount you owed on your car loan at the time it was repossessed and (2) the amount they got in the sale.
Statute of Limitations
The creditor has 4 years from the time it repossessed your car to sue for a deficiency. If more than 4 years have passed, the
statute of limitations
has run. If you believe the statute of limitations has run, you should notify the creditor and ask them to dismiss the lawsuit. If the creditor refuses to do so, you should consult with an attorney and/or include your belief as part of your answer to the lawsuit.
Credit for Resale
The creditor is required to conduct a
commercially reasonable
resale of your vehicle. This means that the creditor has to follow standard sales practices, but is not required to obtain the highest possible price. You should verify that the creditor has truly resold your car and that you have been credited the proper amount toward your loan. If the creditor intends to sell your car after repossession, they must notify you first. You may want to contact an attorney if you did not receive the notice or received the wrong one.
Debt Buyers
You might not recognize the name of the company who is suing you. That is because sometimes the company suing you is not the original creditor. Instead, it is a debt buyer who purchased the loan from your original creditor. When dealing with debt buyers (more than with your original creditor), you need to verify the information they give you because they do not have firsthand knowledge of the original transaction. You should make sure the original creditor actually sold the loan to the debt buyer. The debt buyer must prove that they own the loan as part of their case.
Verification - Not in Agreement
The creditor is the plaintiff in the lawsuit. Their complaint will explain why they believe you owe them money. You should make sure these amounts match with the amounts in your records. If these amounts
do not match
, you should notify the creditor. If you cannot agree on the difference with the creditor, you should consult with an attorney or file an answer explaining your reasoning to the judge.
Verification - in Agreement
If you agree that the amounts are owed, you can conclude the lawsuit by paying the creditor all the money owed. This includes all the court costs and the attorney's fees. If you offer to pay the full amount to the creditor, they MUST accept it, but they may refuse a personal check and require that the payment only be made by certified check or money order. If the creditor does not accept your full payment, you need to provide proof to the judge of how much you offered to pay and when, and why you believe that is the correct amount owed.
Before Trial
After you file an answer, you will need to provide the plaintiff with a disclosure statement, which is a document that explains your position and lists your witnesses and evidence. The court will set the case for a pretrial conference or mediation. You must come to this hearing, which is an opportunity for the parties to meet and discuss a possible resolution of the case. Make sure you confirm where you need to be and at what time. Do not be late. If the judge calls your case and you are not there, the judge may not consider your written defense and enter a default judgment against you. A default judgment means a judgment is signed in your absence without you being able to defend yourself.
If you reach an agreement with the creditor, you will need to put those terms in writing and notify the court. If you do not reach an agreement, the court will set a trial date where each party will produce their evidence.
Note that the plaintiff/creditor may file a Motion for Summary Judgment. You will need to follow the instructions and respond in writing, or you may have a judgment entered against you without a trial.
© 2023 Arizona Supreme Court. All Rights Reserved.
<