State Limits on the Collection of Deficiency Balances

If a creditor repossesses your property (such as a car or major appliance) because you defaulted on the underlying loan, it may still be able to go after you for a deficiency. A deficiency is the difference between what you owed and what the creditor was able to get from selling the property (called the collateral). Some states prohibit creditors from collecting deficiency balances in certain situations. For example, Alabama does not allow creditors to go after a deficiency after repossession if you paid less than $1,000 for the property.

To find if out if your state prohibits creditors from collecting deficiency balances in certain situations, check the chart below. If your state is not listed, it doesn't place additional limits on the collection of deficiency balances after repossession. The applicable code sections are listed in case you want to read the law yourself. To learn how to look up state laws, visit Nolo's Legal Research Center.

To learn more about deficiencies and when you might owe one, see Deficiency Balances After Repossession.

State	Code Section	When a Deficiency Balance Is Prohibited
Alabama	Ala. Code § 5-19-13	If you paid $1,000 or less for the collateral
Arizona	Ariz. Rev. Stat. § 44-5501	If you paid $1,000 or less for the collateral
California	Cal. Civil Code § 1812.5: Cal. Health & Safety Code § 18038.7	If you bought goods on installment. On purchase-money mortgage for a mobile home, manufactured home, commercial coach, truck camper, or floating home (does not include loans not used to purchase the property, such as home equity loans or refinanced loans).
Colorado	Colo. Rev. Stat. § 5-5-103	If you paid $3,000 or less for the collateral
Connecticut	Conn. Gen. Stat. § 36a-785(f),(g)	All repossession sales except for cars or boats with a cash price over $2,000
Dist. of Col.	D.C. Code Ann. § 28-3812(e)	If you paid $2,000 or less for the collateral
Florida	Fla. Stat. Ann. § 516.31(3)	If you paid $2,000 or less for the collateral
Idaho	Idaho Code § 28-45-103(3)	If you paid $1,000 or less for the collateral
Indiana	Ind. Code Ann. § 24-4.5-5-103; 750 Ind. Admin. Code § 1-1-1	If you paid $3,500 or less for the collateral
Kansas	Kan. Stat. Ann. § 16a-5-103	If you paid $1,000 or less for the collateral
Louisiana	La. Rev. Stat. Ann. § 13:4108.2	If the seller does not get an appraisal before the sale, unless you have agreed in writing to a sale without an appraisal
Maine	Me. Rev. Stat. Ann. tit. 9-A § 5-103	If you paid $2,800 or less for the collateral
Maryland	Md. Com. Law §§ 12-626, 12-115	If you paid $2,000 or less for the collateral
Massachusetts	Mass. Gen. Laws ch. 255, § 13J(e)	If the unpaid balance is under $2,000
Minnesota	Minn. Stat. Ann. § 325G.22	If the amount financed was $6,600 or less
Missouri	Mo. Rev. Stat. § 408.556	If the amount financed was $500 or less
Nebraska	Neb. Rev. Stat. § 45-1054	If the unpaid balance is $3,000 or less
Oklahoma	14A Okla. Stat. Ann. § 5-103	If you paid $4,500 or less for the collateral
South Carolina	S.C. Code Ann. § 37-5-103	If you paid $5,150 or less for the collateral
Utah	Utah Code Ann. § 70C-7-101	If you paid $3,000 or less for the collateral
West Virginia	W.Va. Code Ann. § 46A-2-119	If the unpaid balance is $1,000 or less
Wisconsin	Wis. Stat. § 425.209	If the unpaid balance is $1,000 or less
Wyoming	Wyo. Stat. Ann. § 40-14-503	If you paid $1,000 or less for the collateral

State Limits on the Collection of Deficiency Balances

Some states limit the creditor's ability to collect a deficiency in certain situations. Find out if your state is one of them.