When you default on your loan and the lender repossesses your car, the lender typically sells it to recoup the amount you owe. However, if the sale proceeds don't cover the entire loan balance, you will be responsible for the remaining deficiency balance, plus any interest, late fees, and repossession costs.
The specifics of what you still owe after repossession may vary depending on the terms and conditions of your loan agreement and the laws of your state. In some cases, the lender may be able to obtain a deficiency judgment against you for the amount you still owe, which means they could take further legal action to collect the debt, such as garnishing your wages or seizing your property.
To avoid the consequences of repossession and the lingering debt that may come with it, it's crucial to make timely loan payments and contact your lender as soon as possible if you are struggling financially and may be at risk of default.
