The "Repo Man" recently repossessed your car for failure to make payments. You still owed $5,000 on the loan, but since it was always broken, you were glad to get rid of it anyway. The bank sold the car at a wholesale auction for $3,000. The bank also paid the "Repo Man" $200 and paid attorney fees of $300. Based on the deficiency payments clause in your loan, what are you liable for?

Question

Quizplus · Accepted Answer

Based on the information given, the deficiency payment clause in the loan would make the borrower liable for the difference between the outstanding loan balance ($5,000) and the amount for which the car was sold at the auction ($3,000), which equals $2,000. The additional fees paid by the bank do not affect the deficiency payment owed by the borrower. Therefore, the borrower is liable for $2,000.

The "Repo Man" Recently Repossessed Your Car for Failure to Make