Expert: Chris Ebert - 7/6/2009

Question
I received a notice of right to cure on an motorcycle loan. I made the payment they asked for but it was on the last day,and may not even post to the day after the last day. What happens if the loan company repossess?

Answer
Lori,

If the loan company repossess the item then usually you are given a redemption period in which you can go pay for the item in full and take possession of it again. If you can not do this then they will sell the item at a wholesale auction.

After the auction, you will still be liable for the deficiency balance. This is the amount that was owed (including repo fees, penalties and interest) minus what the item was sold for at auction. They can post this amount on your credit report or sue you for it. It is usually better to try to settle for a lesser amount and get it over with.