What is your potential liability from the deficiency payments clause if you default?

Question

Quizplus · Accepted Answer

If you default on a loan with a deficiency payments clause, you may be responsible for paying any legal or repossession fees incurred by the lender, as well as the remainder of the loan balance if the proceeds from the repossession are not sufficient to pay off the loan. Therefore, both options B and C are correct. The loan being in default does not invalidate all loan clauses, so option A is incorrect.

What Is Your Potential Liability from the Deficiency Payments Clause