Legal Question in Credit and Debt Law in Wisconsin

Repossession of Vehilce and Deficiency Judgment

Yes--if you either voluntarily surrender a vehicle or have it repossessed, you will likely have a large debt still remaining after the creditor auctions your vehicle off at the dealer auction and applies the proceeds to your loan. This entitles the bank to a "deficiency" judgment against you, which will serve as a lien against any real estate you own in a county where the judgment is docketed. In addition, the judgment entitles them to garnishee your wages and use other collection techniques against you. These judgments are often large due to the fact that the bank gets more than half of the retail value which you paid for the vehicle. The price received at auctions is generally low because only licensed auto dealers are allowed to bid. Dealers will only pay a price which will allow them to resell the vehicle at a retail markup of 100% to 200% over the price they pay at auction.