Debt collectors have begun acquiring deficient accounts from banks and other lenders much like groups that buy up old credit card debts. An auto deficiency account is created when a car is repossessed because a person defaults on their auto loan, the vehicle is then sold, and the amount paid at auction does not cover the balance of the loan. A party bringing a lawsuit for an auto loan deficiency, whether the actual lender or a debt collector, must comply with the Texas Business and Commerce Code in order to prevail.
The best way to prevail as a Defendant in an auto loan deficiency suit is to show the Plaintiff did not provide adequate notice. A party bringing a suit for an auto loan deficiency must send proper notice that it intends to sale the vehicle. The notice must be provided at least TEN days in advance of the intended sale AND strictly comply with the Texas law (“substantial compliance” is not enough).
Sale of Vehicle
A Plaintiff must also prove that the vehicle was sold in a “commercially reasonable manner.” Some facts to prove the whether or not the car was sold in a reasonable manner include the method of the sale, the location of the sale, and whether or not multiple people were able to bid on the car.
Statute of Limitations
A suit for an auto loan deficiency must be brought in four (4) years.
Finally, much like a credit card lawsuit, many debt collectors will have a tough time proving their case. If the Plaintiff bought the debt from the original lender, they may not have all the correct documents to prove their case.
If you have been sued on an old debt from a car loan, contact us today! While we do not guarantee any results, we do guarantee to fight hard to help you with the relief you need!