Lender wants loan paid on repossessed car

Dear Driving for Dollars,
My car was repossessed, and now the lender is coming after me for the balance of my contract. The lender is threatening to sue me. I don't understand why. It has my car.
-- Javalus

Dear Javalus,
You probably owe money to your lender for several reasons. First, if your repossessed car was sold at auction for less than you owed (which is usually the case), then your lender is entitled to the difference. There are also numerous fees associated with the repossession process, such as attorney's fees, towing fees and storage fees, which you are ultimately responsible for as well. Contact your lender (if you do it by phone, follow up in writing so you have a paper trail), and ask to renegotiate the amount. Some lenders will forgive part of the amount you owe and will often work out a payment plan with you for the balance.