If your car or other personal property is repossessed in Indiana, the creditor can pursue you for a deficiency afterwards. A deficiency occurs when the creditor sells the car or other property after repossessing it and the proceeds from the sale are not enough to cover your unpaid loan balance plus the creditor’s costs of repo and sale. If that happens in Indiana, you owe the difference (called the deficiency) and the creditor can try to collect it from you.
However, Indiana law has one exception to the creditor’s right to collect a deficiency after repossession. Prior to July 1, 2014, if you paid $3,500 or less for the car or other piece of property, the creditor could not pursue you for a deficiency. Effective July 1, 2014, Indiana increased that dollar amount to $4,000. (Learn more about Indiana deficiency after repossession laws.)