When an individual surrenders their vehicle either voluntarily or has it repossessed, the creditor/lender has certain actions they must undergo upon taking possession of the vehicle. Typically the lender will send you a notice explaining to you the amount you owe and how and when you can pay this amount to and by what day it’s due. If a debtor fails to pay the amount the the lender will send out an additional letter informing you where and when your vehicle will be sold (an auction). The lender will use the proceeds of the auction to attempt to satisfy your loan obligation. If, after the proceeds are applied, there is still a balance owed it is what is called a DEFICIENCY.
Once the deficiency has been established the lender may attempt to collect that money from the debtor by sending out demand letters and attempting to call the debtor to make payment arrangements. If a debtor fails to respond to the demand letters/phone calls the lender will likely do one of two things… charge the debt as bad debt and sell it to a junk debt buyer, or they will sue you directly.
If a debt is sold to a junk debt buyer then the debtor will receive a notice saying that the junk debt buyer has purchased the debtor from the original creditor and they they are now the owner of the debt (they step into the shoes of the original creditor). The junk debt buyer will also attempt to send demand letters and call the debtor to try to satisfy the debt. If the junk debt buyer is unable to collect they money owed through demand letters and phone calls, they will then likely sue.
Typically in South Florida most of the original creditors will sue for a deficiency or if they sell the debt to a junk debt buyer they will send it to one of the following creditors
Shmucher Law, PL has assisted in defending numerous individuals with the auto deficiency lawsuits. Feel free to reach out to us if you have been sued for an auto deficiency claim.