1. Repossession and Sale: The lender may still repossess the vehicle even if you've voluntarily surrendered it. The lender will sell the car at a public auction, and use the proceeds to pay off the outstanding loan balance. Any remaining balance after the sale is referred to as the "deficiency balance."
2. Deficiency Judgment: The lender can sue you for the deficiency balance. If the lender wins the lawsuit, they can obtain a deficiency judgment against you. This judgment will allow them to collect the deficiency balance through various means, such as garnishing wages or seizing assets.
3. Debt Collection: The lender may also assign the debt to a third-party debt collector. The debt collector will then attempt to collect the debt through various methods, including phone calls, letters, and possibly legal action.
4. Bankruptcy: If you are unable to pay off the deficiency balance and meet other financial obligations, you may consider filing for bankruptcy. Depending on the type of bankruptcy you file, the lender may be barred from collecting the debt.
