Minnesota has one of the most consumer-friendly anti-deficiency statutes in the country. If a creditor repossesses your car or other personal property in Minnesota, the creditor is prohibited from collecting a deficiency from you if the amount you financed to purchase the property is $6,900 or less. This is an increase from the former dollar amount of $6,600.
If your car or other secured personal property is repossessed, in most cases the creditor will sell the property. If the sale proceeds are not enough to cover the unpaid loan balance plus the costs of repo and sale, the difference between the two numbers is called the deficiency. In most cases, the creditor can try to collect this amount from you. If you don’t pay, it can sue you.
Minnesota puts some limits on a creditor’s right to collect a deficiency. If the amount you financed to purchase a car or other secured personal property is $6,900 or less, the creditor cannot go after you for a deficiency. (Learn more about Minnesota’s personal property anti-deficiency law.)