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Question: What should you do if being sued for a deficiency on a repossessed car after 4 years? I had my car voluntarily repossessed 4 years ago when I could no longer make the payments. There has been no contact since until yesterday when I received a demand for the full amount of the car. There are no assets to take as I am living check to check with kids. What are my options considering it’s been 4 years?

Answer: The statute of limitations in Illinois on a claim for failure to pay on a retail installment contract (such as one for the purchase of a car) is four years from the default or last payment, whichever is later. The date of default would be prior to the date of repossession.

You should dispute the debt. There is a form letter on our web site that can be used for that purpose. If you have been sued she needs to comply with the instructions on the summons and avoid default.

You should not pay or agree to pay or admit anything. If the statute of limitations has run, you are under no legal obligation to pay.

A demand to pay on a time barred debt may violate the Fair Debt Collection Practices Act. Filing suit on a time barred debt is a violation.

A demand for the full amount under the contract (not just the deficiency?) may violate both the Fair Debt Collection Practices Act and the Uniform Commercial Code. They are supposed to give a credit for the resale of the car and eliminate unearned finance charges. The resale has to be commercially reasonable and after proper notice (send us the notices to review).

Both the FDCPA and UCC provide for statutory damages in consumer cases. The FDCPA is up to $1,000; the UCC is an amount equal to the finance charge plus 10% of the price of the vehicle/ amount financed. The FDCPA provides for the award of fees against the debt collector.

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