Sued by Credit Acceptance in Texas: Repossession and Deficiency Suits

Most people sued by Credit Acceptance Corporation never applied to it directly. They bought a car from a dealership and signed the dealer's retail installment contract, and the dealer then assigned that contract to Credit Acceptance. When payments stop, the usual sequence is repossession, an auction sale and then a lawsuit for the deficiency: what the company says is still owed after the car was sold. Texas law sets detailed rules for each of those steps, and whether they were followed can matter a great deal.

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How Credit Acceptance Gets Your Contract

Credit Acceptance is a Michigan corporation based in Southfield, Michigan. Its annual report on Form 10-K for 2025 describes two dealer programs. Under the Portfolio Program, it advances money to the dealer and services the consumer's contract. Under the Purchase Program, it buys the contract outright. Either way, Credit Acceptance usually becomes the holder you pay. The 10-K reports 15,745 active dealers in 2025.

In Texas, Credit Acceptance Corporation holds an active Motor Vehicle Sales Finance license (No. 38531) from the Office of Consumer Credit Commissioner. Texas car-dealer financing is governed by Finance Code chapter 348.

Your contract should also contain the federal Holder Rule notice (16 C.F.R. § 433.2). It says any holder of the contract is subject to the claims and defenses you could raise against the seller, with your recovery limited to the amounts you paid. If the dealer misrepresented the car or the deal, that may matter in a suit by Credit Acceptance.

Repossession: What Texas Law Requires

• No breach of the peace. After default, a secured party may take the car without a court order only if it does so without breaching the peace (Business & Commerce Code § 9.609).
• Your belongings. If the contract lets the holder keep or dispose of personal items found in the car, it must send you written notice within 15 days after it discovers them. You then have until the 31st day after the notice is mailed or delivered to claim them (Finance Code § 348.407).
• Getting the car back. You may redeem the car before it is sold by paying all obligations it secures plus reasonable expenses and attorney's fees (§ 9.623). Reinstating the contract after the balance is demanded happens only if you and the holder agree (Finance Code § 348.122). Credit Acceptance's 10-K says that where appropriate or required by law, it returns the vehicle if the consumer makes payments that bring the account current.

Texas exempts a vehicle for each licensed family member from seizure by judgment creditors (Property Code § 42.002(a)(9)). That exemption does not cancel a lender's security interest in the car that secures its own contract. See can they take my car?

The Sale and the Notices You Should Have Received

Every aspect of the sale, including the method, timing, place and terms, must be commercially reasonable (§ 9.610(b)). Before the sale, the secured party must send you a reasonable authenticated notification (§ 9.611). In a consumer-goods transaction, the notice must, among other things, describe any liability you will have for a deficiency, give a phone number where you can get the amount needed to redeem the car, and give a phone number or address for more information (§ 9.614). Credit Acceptance's 10-K says repossessed vehicles not redeemed are generally sold at wholesale auction.

After the sale, the proceeds go first to the reasonable expenses of repossession and sale, then to the debt (§ 9.615). In a consumer case, the secured party must send you a written explanation of how it calculated the deficiency. It must do so before or when it first makes a written demand for the deficiency, and within 14 days after you request one (§ 9.616(b)). Keep every letter you received after the repossession. The dates and contents of those letters are often the center of the defense.

When the Rules Are Not Followed

If a secured party does not comply with chapter 9, a court may restrict collection, and you may recover damages for losses caused by the noncompliance (§ 9.625(a)–(b)). When the collateral is consumer goods, a debtor may recover at least the credit service charge plus 10 percent of the principal amount, or the time-price differential plus 10 percent of the cash price (§ 9.625(c)(2)). Whether that applies depends on the facts.

For business transactions, § 9.626(a) spells out how noncompliance limits a deficiency. For consumer transactions like most car purchases, § 9.626(b) leaves the rule to the courts and allows them to continue applying established approaches. Whether the notice and sale rules were followed can be a central question in a deficiency case, so it is worth raising early. See can I be sued for a car deficiency after repossession?

Fees and Charges in the Deficiency

A Texas retail installment contract may provide for reasonable attorney's fees if the contract is referred to an attorney who is not a salaried employee of the holder. It may also provide for court costs and reasonable out-of-pocket repossession expenses, including storage, reconditioning and resale, subject to good faith and commercial reasonableness (Finance Code § 348.108). Ask for an itemized account of every charge added after the repossession. According to its 10-K, Credit Acceptance may offer to settle a deficiency for less than the amount owed and may assign accounts to third-party collection attorneys who work on contingency.

Arbitration: The 30-Day Rejection Window

The dealer contracts Credit Acceptance buys have included arbitration clauses. In Harris v. Credit Acceptance Corp., No. 21-12986 (D.N.J. Feb. 16, 2022), the court described a dealer contract assigned to Credit Acceptance with these terms:

• "We" included the seller's assignee, expressly including Credit Acceptance.
• Covered disputes included defaults and the collection of amounts due.
• A rejection notice worked only if it was signed by all buyers, co-buyers and cosigners and postmarked within 30 days after the contract date.

The court enforced the arbitration clause in that case. Your contract may use different terms, so read the arbitration section of your own contract. Whether to use arbitration in a deficiency case is a strategic decision; see can a debt case be moved to arbitration?

Government Actions: What They Covered, and Texas's Position

On January 4, 2023, the New York Attorney General and the Consumer Financial Protection Bureau jointly sued Credit Acceptance in federal court in Manhattan. They alleged deceptive and abusive practices in its auto lending, which the company disputed. The CFPB withdrew as a plaintiff, and the court approved its withdrawal on April 29, 2025. On September 17, 2026, Credit Acceptance entered consent judgments with the attorneys general of 40 states and the District of Columbia, resolving the New York case and a multistate investigation. According to the company's Form 10-Q for the quarter ended September 30, 2026, the judgments:

• Required payments of $15.5 million to the participating attorneys general and $60 million to a trust for consumer remediation.
• Provided for waiver of outstanding balances for certain customers with open accounts as of December 1, 2025.
• Required five years of changes to debt-collection practices for certain loans originated after December 1, 2025.

The company admitted no wrongdoing. The same filing says Texas withdrew from the multistate investigation, and Texas is not listed among the participating states. None of this decides anything about your account or your case. Our update on the Supreme Court's CFPB funding decision explains a ruling that paused the New York case for a time.

Deadlines, Court and Limitations

Many deficiency claims fall within the justice court limit of $20,000. There, your answer is due by the end of the 14th day after service (Texas Rule of Civil Procedure 502.5). In county or district court, it is due by 10:00 a.m. on the Monday after 20 days (Rule 99(b)). Use the answer deadline calculator. The four-year limitations period is a defense you must raise against a creditor suing on its own contract (Civil Practice and Remedies Code § 16.004), and in county or district court it must be pleaded (Rule 94).

The Texas Debt Collection Act applies to creditors as well as collectors (Finance Code ch. 392). A law firm that regularly files consumer collection suits is generally a "debt collector" under the federal Fair Debt Collection Practices Act (Heintz v. Jenkins, 514 U.S. 291 (1995)). Once it knows you have a lawyer, it must generally deal with your lawyer instead of you (15 U.S.C. § 1692c(a)(2)). Claims for violations are a separate federal lawsuit, not a counterclaim, and a separate service. See our FDCPA page.

How We Defend Deficiency Suits

We answer on time and request the repossession file, the pre-sale notice, the auction records and the deficiency explanation. We check each against chapter 9 and chapter 348, then press the defense or negotiate from there. Our firm has had hundreds of debt lawsuits dismissed. We work statewide, mostly by phone, email and e-filing. Our phones are answered 7 days a week, and we speak Spanish.

Flat fees from $400, with payment plans available. Call or text (214) 945-0000 for a free case evaluation.

Texas Debt Law is not affiliated with Credit Acceptance Corporation. This guide is general information, not legal advice.

Sources

• Credit Acceptance Corporation, Form 10-K for 2025, and Form 10-Q for the quarter ended September 30, 2026, SEC EDGAR
• OCCC license search (ALECS) (Motor Vehicle Sales Finance license 38531)
• Texas Business & Commerce Code, chapter 9 (§§ 9.609–9.616, 9.623, 9.625, 9.626)
• Texas Finance Code, chapter 348 (§§ 348.108, 348.122, 348.407)
• 16 C.F.R. § 433.2 (FTC Holder Rule), eCFR
• Harris v. Credit Acceptance Corp., No. 21-12986 (D.N.J. Feb. 16, 2022), GovInfo
• Texas Property Code, chapter 42 (§ 42.002)
• Texas Rules of Civil Procedure (Rules 94, 99, 502.5)
• Texas Civil Practice and Remedies Code, chapter 16 (§ 16.004)

General information, not legal advice for your case.