Nothing makes folks happier than buying a new car. In fact, for many it is the most expensive purchase made. For almost everyone, a loan is taken out and that loan is secured by the car. This means if you default the lender can take your car and sale it to help pay back the loan. Often, the value of the car is less than the loan so there is a deficiency which ends up in a lawsuit.

In Tennessee, no warning is given before repossession. The only requirements are that the debtor must be in default and the Repo Man must not breach the peace. After repossession and ten (10) days prior to the car’s disposition, Tennessee Code Annotated §47-9-611 requires notice to the debtor and Tennessee Code Annotated §47-9-614 details what must be in the notice. The Tennessee code requires that the notice explain:

· How the repossessed car will be disposed of. It may choose to sell or keep the vehicle to satisfy the debt. If the lender intends to sell the motor vehicle, it must tell you if it will be sold at a public auction or a private sale.

· If the lender intends to sell the car at a public auction, it needs to tell you the date, time, and place of the sale.

· If the lender will sell the car privately, you need to be told the date after which the motor vehicle will be sold.

· Who you can call, including a phone number to learn how much you need to pay to redeem the motor vehicle.

· Who you can contact to get additional details about the sale of the car. The lender must include a phone number or mailing address in this contact information.


Now, Tennessee Code Annotated §47-9-610 states that “[e]very aspect of a disposition of [the car], including the method, manner, time, place, and other terms, must be commercially reasonable.” There are several factors in determining whether the disposition of the car was “commercially reasonable” and one of those factors is notice. If you did not receive proper notice the Court might find that the disposition of the car was not “commercially reasonable”, and you may not be on the hook for the deficiency.


Defending deficiency cases is tricky work and requires a lawyer if success is at all a concern. Contact our office right away if you find that you are sued due to a deficiency on a car loan. We can help.

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