When your car is repossessed, the lender sells it at auction to try to recoup the money you owe. However, the auction price may not be enough to cover the full amount of the loan, plus any fees or expenses that the lender incurred. If this is the case, you will still owe the lender the remaining balance, called a "deficiency balance."

The deficiency balance is a debt that you are still legally obligated to pay, even though your car has been repossessed. The lender can sue you to collect the deficiency balance, and they can garnish your wages or take other steps to collect the debt.

Bankruptcy can discharge your debt, including the deficiency balance.

If you are facing repossession, it is important to speak with a bankruptcy attorney to discuss your options.