A Philippine Legal Article

When a car bought on installment is repossessed in the Philippines because the buyer defaulted, one of the most disputed legal questions is whether the creditor may still collect the deficiency—the unpaid balance that remains after repossession and sale of the vehicle.

This issue sits at the intersection of the Civil Code, the Recto Law on sales of personal property by installment, the law on chattel mortgages, and the actual structure of vehicle financing used by banks, financing companies, and car dealers. In practice, many buyers assume that once the vehicle is taken back, the debt is automatically wiped out. Many creditors assume the opposite—that repossession is only a partial recovery, and they may still demand the unpaid balance. Philippine law does not treat all repossessions the same. The answer depends heavily on the legal nature of the transaction and on which remedy the creditor chose.

What follows is a comprehensive discussion of the topic in the Philippine setting.

I. What is a “deficiency” after repossession?

A deficiency is the amount still claimed by the creditor after applying the proceeds of the repossessed vehicle to the debtor’s unpaid obligation.

A typical sequence looks like this:

The buyer acquires a car on installment. The buyer defaults. The creditor repossesses the car. The car is sold at auction or otherwise disposed of. The sale proceeds are then credited to the outstanding account. If the proceeds are less than the total unpaid obligation, the creditor claims the difference as the deficiency balance.

Example:

Contract price financed: ₱1,200,000
Amount already paid: ₱300,000
Unpaid balance at default, with charges: ₱950,000
Repossessed vehicle sold for: ₱650,000

The creditor then claims a deficiency of ₱300,000.

Whether that ₱300,000 is legally collectible depends on the governing law and the creditor’s chosen remedy.

II. The governing Philippine legal framework

Several legal rules matter:

1. The Recto Law

The Recto Law is found in the Civil Code provisions governing the sale of personal property on installments. A motor vehicle is personal property. This law is central when the transaction is truly a sale of personal property payable in installments.

2. Chattel Mortgage Law

Cars financed in the Philippines are commonly secured by a chattel mortgage. The creditor may foreclose the chattel mortgage if the debtor defaults.

3. The Civil Code on obligations and contracts

General rules on breach, damages, rescission, acceleration clauses, unconscionable penalties, and interpretation of contracts also matter.

4. Consumer and regulatory considerations

Though the core question is contractual and civil, repossession practices can also raise issues of notice, fairness, bad faith, and abusive collection.

III. The single most important rule: the Recto Law bar on deficiency claims

A. The basic rule

Under the Recto Law, when personal property is sold on installment, the seller has limited remedies if the buyer defaults. As commonly explained, the seller may generally choose among these remedies:

Exact fulfillment of the obligation, if that is still possible
Cancel the sale if the buyer’s default meets the legal threshold
Foreclose the chattel mortgage on the thing sold, if one has been constituted

The crucial point is this:

If the seller chooses foreclosure of the chattel mortgage, the seller cannot recover any unpaid balance or deficiency. Any agreement allowing recovery of the deficiency is generally void.

This is the anti-deficiency rule that many Filipino car buyers have heard in simplified form.

B. Why the law adopted this rule

The law was designed to prevent abuse in installment sales of personal property. Historically, sellers could repossess the property, keep prior payments, sell the property again, and still sue for the balance. That placed buyers at severe disadvantage. The Recto Law prevents the seller from having the best of all worlds.

The policy is straightforward:

If the seller opts to retake the property through foreclosure, that remedy is treated as the seller’s final recourse. The seller cannot both repossess the vehicle and still pursue the buyer for the deficiency.

C. Effect of the rule

If the Recto Law applies and the creditor’s chosen remedy is foreclosure of the chattel mortgage on the car sold on installment:

the repossession/foreclosure cuts off the right to collect the deficiency;
the creditor may not validly stipulate around that prohibition;
the debtor may raise the Recto Law as a defense if sued for the deficiency.

This is the most debtor-protective part of Philippine law on car repossessions.

IV. But not all car financing arrangements are treated the same

This is where confusion usually begins.

Many vehicle transactions look identical from the buyer’s point of view: the buyer gets a car, pays monthly installments, and signs a chattel mortgage. But the law may classify the transaction differently depending on who the parties are and how the documents are structured.

The key question is:

Was this a sale of personal property on installment covered by the Recto Law, or was it a loan secured by a chattel mortgage?

That distinction often determines whether a deficiency may still be collected.

V. Sale on installment versus loan secured by chattel mortgage

A. Sale on installment

This is the classic Recto Law setting. The seller sells the car to the buyer, payable over time. The car itself is the subject of the sale, and the unpaid price is secured by chattel mortgage over the same vehicle.

In that setting, if the seller forecloses the chattel mortgage after default, the seller is generally barred from recovering the deficiency.

B. Loan transaction

Sometimes the structure is different. A bank or financing company may not be the seller of the vehicle in the original sense. Instead, it finances the purchase through a loan, and the buyer grants a chattel mortgage over the car as security for that loan.

In a pure loan setting, creditors often argue that the Recto Law does not apply because there was no installment sale by the suing creditor; there was a loan secured by mortgage. Under general principles of secured transactions, foreclosure of collateral does not always extinguish the full debt, so a deficiency claim may still be pursued unless prohibited by law or contract.

C. Why this distinction matters so much

The same real-world event—“my car was repossessed”—can have different legal consequences:

If it is governed by the Recto Law installment-sale framework, deficiency recovery is generally barred after foreclosure.
If it is treated as a separate financing loan, deficiency recovery may be allowed, subject to the contract, proper accounting, and defenses.

VI. The problem of form versus substance

Philippine law does not stop at labels alone. Courts generally look at the substance of the transaction, not just the title of the contract.

A creditor cannot always avoid the Recto Law simply by drafting the papers in a more sophisticated way. If the arrangement is in truth an installment sale of personal property and the financing structure is merely a device to evade the buyer protections of the law, a court may look through the form.

This is one of the most litigated areas in repossession disputes: creditors characterize the transaction as a loan; debtors argue that it is really a sale on installment falling under the Recto Law.

Factors that may become important include:

who the real seller was;
whether the financing company effectively stepped into the seller’s shoes;
whether the transaction was assigned;
how the documents were executed;
whether the car itself was the thing sold on installment;
whether the financing structure was merely an accommodation to collect the purchase price.

Because of this, deficiency cases are often fact-sensitive.

VII. What exactly counts as “foreclosure” for purposes of the anti-deficiency rule?

The Recto Law prohibition is usually tied to the choice of foreclosure of the chattel mortgage. If the creditor has elected that remedy, the law bars further recovery of the unpaid balance.

In actual practice, repossession often happens before sale. The creditor takes physical possession of the car, then later conducts a sale or auction. The repossession is part of the foreclosure process.

A debtor will often argue that once the creditor repossessed and foreclosed the mortgage over the car sold on installment, the creditor had already chosen the foreclosure remedy and therefore can no longer sue for any deficiency.

A creditor, on the other hand, may argue:

there was no Recto Law transaction;
repossession was consensual and not the kind of foreclosure contemplated by the anti-deficiency rule;
the action is based on a separate loan obligation rather than the unpaid price of the sale.

Again, the true nature of the transaction and the remedy taken are central.

VIII. Can the creditor choose only one remedy?

Under the Recto Law framework, the remedies are generally considered alternative, not cumulative. That means the creditor cannot freely combine them so as to recover more than what the law allows.

So, in a covered sale on installment, the seller cannot:

foreclose the chattel mortgage,
keep prior payments,
recover the vehicle,
and still sue for the remaining balance.

That would defeat the law’s protective purpose.

The law is designed to force an election of remedy. Once the creditor has chosen foreclosure, it lives with that choice.

IX. What if the contract says the buyer will remain liable for any deficiency?

This is common in financing documents. Many chattel mortgage contracts or promissory notes contain clauses saying that after repossession and sale, the debtor shall remain liable for any deficiency.

Whether such a clause is enforceable depends on the governing legal character of the transaction.

If the Recto Law applies:

A stipulation allowing recovery of deficiency after foreclosure is generally considered ineffective or void insofar as it contradicts the law.

If the transaction is a true loan secured by chattel mortgage:

Such a clause may be enforceable, subject to ordinary rules on validity, fairness, proof of actual balance, and defenses against excessive charges.

So the clause itself is not the end of the inquiry. The real issue remains: what law governs this particular transaction?

X. Liability of the buyer when the creditor sues for deficiency

If the creditor files a civil action for deficiency after repossession, the buyer may face a complaint demanding:

the alleged unpaid principal balance,
accrued interest,
penalties,
liquidated damages,
attorney’s fees,
litigation expenses.

The buyer’s potential liability depends on several questions:

1. Does the Recto Law bar the claim?

If yes, the deficiency action may fail entirely.

2. Was the transaction really a loan?

If yes, deficiency may in principle be recoverable.

3. Was the sale of the repossessed car properly conducted?

If the creditor cannot prove how the proceeds were applied, the claimed deficiency may be reduced or denied.

4. Are the interest rates, penalties, and charges valid?

Even where the debt survives, excessive penalties and unconscionable charges may be struck down or reduced.

5. Was there proper notice and accounting?

A debtor may challenge the creditor’s figures if the accounting is opaque or unsupported.

XI. Burden of proof in deficiency cases

A creditor suing for deficiency does not win merely by alleging that a balance remains. It must usually prove the amount due with competent evidence.

That often requires:

the contract or contracts;
promissory note;
deed of chattel mortgage;
statement of account;
proof of default;
repossession records;
notice of sale or auction;
result of sale;
application of proceeds;
computation of the remaining balance.

If the creditor’s records are incomplete, inconsistent, or self-serving, the debtor can attack the deficiency claim.

In many cases, the fight is not only about whether deficiency is legally allowed, but also whether the amount claimed is accurate.

XII. Does repossession automatically cancel the debt?

No, not in every case.

That belief is only partly true.

It may effectively cancel further collection if:

the transaction is governed by the Recto Law, and
the creditor elected foreclosure of the chattel mortgage over the thing sold.

It does not automatically cancel the debt if:

the transaction is treated as a separate loan secured by mortgage, or
the creditor chose another remedy consistent with law.

So repossession alone does not always equal extinguishment of the account. The legal basis of the financing controls.

XIII. Voluntary surrender versus forcible repossession

Debtors sometimes “voluntarily surrender” the vehicle because they can no longer pay. Creditors sometimes encourage surrender and present forms describing the turnover as voluntary.

Does voluntary surrender change the anti-deficiency rule?

Not necessarily.

What matters is not only whether the debtor physically handed over the car without resistance. The real legal questions remain:

Was the underlying transaction a Recto Law installment sale?
Did the creditor effectively elect foreclosure?
Was the surrender merely a step in the foreclosure and disposal of the car?

A creditor may argue that voluntary surrender is a separate arrangement that does not extinguish liability. A debtor may argue that it was simply the practical method of implementing foreclosure, so deficiency remains barred.

Thus, voluntary surrender does not automatically mean the buyer remains liable, nor does it automatically wipe out the debt. The facts and legal structure still govern.

XIV. Importance of notices in repossession and sale

Notice issues are often significant, especially where the creditor later claims a deficiency.

The debtor may question:

whether there was valid notice of default;
whether acceleration of the debt was proper;
whether repossession was lawful;
whether the debtor received notice of sale or auction;
whether the sale price was commercially fair;
whether the proceeds were properly credited.

Lack of notice may not always erase the debt by itself, but it can weaken the creditor’s claim, raise bad-faith issues, and support a defense that the accounting is unreliable or the sale was irregular.

XV. Sale price of the repossessed vehicle and underpricing issues

One recurring debtor complaint is that the repossessed vehicle was sold at an unreasonably low price, inflating the alleged deficiency.

This matters because a creditor should not be allowed to manipulate the sale of collateral and then transfer the loss entirely to the debtor.

Possible debtor arguments include:

the auction price was grossly inadequate;
the sale was not properly advertised or conducted;
the creditor failed to obtain a fair value;
the creditor itself bought the car at a low price;
the accounting was not transparent.

In a Recto Law setting, this may reinforce the argument that no deficiency is collectible at all. In a loan setting, it may go to the amount of the deficiency, the creditor’s good faith, and whether the court should accept the computation.

XVI. Can prior installments already paid be recovered by the buyer?

Usually, once installments were paid under the contract, they are not simply returned because the vehicle was repossessed. Prior payments may be treated as payments for use, depreciation, or partial fulfillment, depending on the legal context.

However, if the creditor acted illegally, charged unlawful amounts, or wrongfully repossessed the vehicle, the debtor may potentially assert counterclaims or claims for damages. The outcome depends on facts and pleadings.

The main protection of the Recto Law is not that the buyer gets all prior payments back, but that the seller cannot still run after the buyer for the deficiency after foreclosure.

XVII. The role of acceleration clauses

Car financing contracts usually contain an acceleration clause, stating that upon default, the entire unpaid balance becomes due.

Such clauses are generally recognized, but they do not override the Recto Law. So even if the whole balance is accelerated, a creditor covered by the Recto Law still cannot both foreclose the chattel mortgage and recover the deficiency.

In a loan transaction, acceleration may validly mature the entire obligation, and after foreclosure the creditor may still claim any deficiency if allowed by law and contract.

XVIII. Interest, penalties, liquidated damages, and attorney’s fees

Even when a deficiency claim is theoretically allowed, the amount recoverable is not unlimited.

Debtors may challenge:

excessive interest;
multiple overlapping penalty charges;
unconscionable liquidated damages;
unreasonable attorney’s fees automatically imposed;
charges unsupported by contract.

Courts may reduce penalties and attorney’s fees when they are iniquitous or unconscionable. A creditor must prove the basis for these add-ons.

So a buyer sued for deficiency should not assume the statement of account is final or untouchable.

XIX. Can the creditor recover from guarantors or co-makers?

If there is a guarantor, surety, or co-maker, separate issues arise.

Where the principal debtor would no longer be liable for a deficiency because the Recto Law bars further recovery after foreclosure, the creditor generally should not be able to do indirectly through guarantors what it cannot do directly against the principal buyer on the same barred deficiency. The accessory nature of such undertakings becomes important.

In contrast, if the underlying obligation remains valid and enforceable because the transaction is treated as a loan, guarantors or sureties may face exposure according to the terms of their undertaking.

This is another area where the precise documentation matters greatly.

XX. What if the creditor is a bank or financing company, not the dealer?

This is one of the hardest practical questions.

Many financed car sales involve one or more of the following:

the dealer sells the vehicle;
the buyer signs installment documents;
the receivable is assigned to a financing company;
the financing company or bank holds the chattel mortgage;
the bank later repossesses and sues.

The creditor will often argue that it is not the original seller, so the Recto Law anti-deficiency rule should not apply in the same way. The debtor may respond that the financing arrangement was functionally part of the installment sale and cannot be used to defeat the law’s protections.

There is no one-sentence answer that fits all such cases. The outcome can depend on whether the financing company is treated as standing in the shoes of the seller, whether the assignment included the seller’s rights subject to the same limitations, and whether the entire arrangement is viewed as one integrated installment sale or as a distinct loan transaction.

This is why deficiency litigation often turns on documentary details.

XXI. Replevin and repossession suits

Sometimes repossession is accomplished through replevin in court, especially if the creditor cannot peacefully recover the vehicle. Replevin is a provisional remedy allowing seizure of personal property claimed by a party entitled to possession.

The use of replevin does not automatically answer the deficiency issue. It is a procedural device to recover possession. The substantive question remains whether, after taking back and disposing of the vehicle, the creditor may still collect a deficiency.

If the underlying transaction is one where the Recto Law bars deficiency after foreclosure, using replevin as the method of repossession should not expand the creditor’s substantive rights.

XXII. Defenses available to the buyer sued for deficiency

A buyer facing a deficiency suit after repossession may raise one or more of the following defenses, depending on the facts:

1. Recto Law bar

The repossession and foreclosure of the vehicle sold on installment extinguished any further claim for deficiency.

2. Wrong characterization of the transaction

The creditor calls it a loan, but in substance it was an installment sale of personal property covered by the Recto Law.

3. Election of remedies

The creditor already elected foreclosure and is now improperly seeking an inconsistent additional remedy.

4. Invalid or unsupported accounting

The creditor failed to prove the amount of deficiency with competent evidence.

5. Unfair or irregular sale

The repossessed vehicle was sold under questionable conditions or at an unconscionably low price.

6. Excessive charges

Interest, penalties, liquidated damages, and attorney’s fees are excessive, duplicative, or contrary to law.

7. Lack of proper notice or bad faith

The repossession or sale was attended by procedural or equitable defects.

8. Set-off or counterclaims

The debtor may assert damages for wrongful repossession, harassment, or other actionable conduct if supported by facts.

XXIII. Can the buyer sue for wrongful repossession?

Yes, potentially.

A buyer may have a cause of action or counterclaim where the creditor:

repossessed without legal basis;
used force, intimidation, or breach of peace;
seized the wrong vehicle;
failed to follow contractual or legal procedures;
acted in bad faith;
disposed of the vehicle irregularly;
publicly humiliated or harassed the debtor.

Wrongful repossession can give rise to claims for damages. Even if the debtor was in default, the creditor is not free to use unlawful methods.

XXIV. Criminal liability versus civil liability

Deficiency after repossession is ordinarily a civil matter, not a criminal one. Failure to pay a debt is not by itself a crime.

However, criminal issues may arise separately in unusual cases involving fraud, falsification, estafa-type allegations, or unlawful acts during repossession. Those are distinct from the basic deficiency question.

The normal deficiency case is a civil action for collection.

XXV. What happens if the buyer signed a “dacion” or waiver?

Sometimes after default, debtors sign documents such as:

deed of voluntary surrender,
dacion en pago,
waiver,
acknowledgment of deficiency,
restructuring agreement.

These documents can materially change the legal landscape.

A. Dation in payment

If the vehicle is expressly accepted as payment of the obligation, that may extinguish the debt to the extent agreed upon.

B. Acknowledgment of deficiency

If the debtor separately acknowledges liability after surrender, the creditor may rely on that document. But the debtor may still challenge it if it violates mandatory law, was obtained through pressure, or merely attempts to circumvent the Recto Law.

C. Waivers

Waivers are not automatically valid, especially if they renounce statutory protections in a way the law does not allow.

Thus, post-default documents should be read very carefully. They may help the creditor, but they are not always conclusive.

XXVI. Assignment of receivables and assignee rights

Where the dealer assigns the installment receivable to a bank or financing company, the assignee generally acquires only such rights as are legally transferable and enforceable. An assignee ordinarily cannot obtain greater substantive rights than those that existed under the original transaction, especially if the law limits those rights.

This becomes important where the debtor argues that the anti-deficiency rule follows the receivable even after assignment. The creditor may contest this by insisting that the structure created a separate loan. Again, the documentary setup is critical.

XXVII. The practical reality of Philippine car financing disputes

In the Philippines, many deficiency disputes are not resolved purely by abstract doctrine. They often turn on:

whether the debtor has legal assistance;
the exact wording of the contracts;
who filed the case and on what theory;
whether the debtor answered the complaint;
whether the creditor can produce complete records;
whether the court views the arrangement as a sale or a loan.

A buyer who ignores summons may lose by default even if strong defenses existed. A creditor with poor documentation may lose despite having a plausible claim.

So practical litigation conduct matters almost as much as doctrine.

XXVIII. Common misconceptions

Misconception 1: “Once the car is repossessed, the debt is always erased.”

Not always. That is only reliably true where the Recto Law governs and foreclosure of the chattel mortgage was the chosen remedy.

Misconception 2: “The creditor can always collect deficiency because I signed the contract.”

Not always. Contract clauses cannot override a mandatory legal prohibition.

Misconception 3: “If I voluntarily surrendered the car, I automatically admitted liability for the deficiency.”

Not necessarily. Voluntary surrender by itself does not settle the legal issue.

Misconception 4: “Banks are always outside the Recto Law.”

That is too simplistic. The actual transaction structure matters.

Misconception 5: “The statement of account is final.”

No. It may be challenged for legal and factual defects.

XXIX. How courts typically approach the issue

In broad terms, Philippine courts confronting deficiency claims after car repossession generally work through these questions:

What is the true nature of the transaction?
Is the case governed by installment-sale rules under the Recto Law, or by a separate loan-and-mortgage arrangement?
Did the creditor choose foreclosure of the chattel mortgage over the thing sold?
If yes, does the anti-deficiency rule apply?
If deficiency is not barred, how much is actually due after proper accounting?
Are the added charges lawful and reasonable?
Were the repossession and sale conducted properly and in good faith?

This is the analytical roadmap.

XXX. Special relevance to second-hand vehicles and dealer financing

The same general principles can apply whether the vehicle is brand new or second-hand, so long as it is personal property sold on installment and secured by chattel mortgage. What changes is often the documentation and market value issues.

Used-car financing disputes tend to raise sharper questions about:

fair resale value,
depreciation,
auction price manipulation,
hidden charges,
condition of the vehicle at repossession.

These issues can significantly affect deficiency computations, especially if the creditor’s sale price is suspect.

XXXI. What a debtor should examine in the paperwork

In assessing whether a deficiency claim is valid, the following documents are especially important:

sales invoice and deed of sale;
promissory note;
disclosure statement;
deed of chattel mortgage;
financing agreement;
assignment documents;
notice of default;
notice of repossession;
notice of sale or auction;
certificate of sale;
final statement of account;
voluntary surrender or waiver forms, if any.

The documents often reveal whether the transaction was structured as a true installment sale or as a separate loan, and whether the creditor complied with legal requirements.

XXXII. What a creditor must be careful about

A creditor seeking to recover deficiency after repossession must be careful not to assume that repossession automatically preserves the right to sue for the balance. It should examine:

whether the transaction falls under the Recto Law;
whether it has already elected foreclosure;
whether the documents support a separate loan theory;
whether sale proceeds were properly documented and credited;
whether notices were properly served;
whether charges claimed are defensible.

A poorly framed complaint may fail if it ignores the anti-deficiency rule.

XXXIII. Public policy behind the anti-deficiency rule

The anti-deficiency rule reflects a strong policy choice: in installment sales of personal property, the law protects buyers from oppressive recovery practices. A seller should not repossess the property and still continue extracting the rest of the price as though nothing had been recovered.

The law recognizes the practical imbalance between commercial sellers or financiers and consumers who buy movable goods on credit. Cars are a leading example because they rapidly depreciate, are easy to repossess, and are frequently financed with standard-form contracts.

That policy remains the moral core of the Recto Law discussion.

XXXIV. Tension between credit enforcement and buyer protection

There is also a legitimate competing concern. Creditors argue that if every repossession wipes out the remaining balance, debtors may walk away too easily, especially when the car’s value has dropped sharply. That is one reason creditors structure many transactions as financing loans rather than straightforward installment sales.

Philippine law therefore balances two policies:

protect buyers in installment sales from abusive double recovery;
allow lenders in genuine secured loans to recover what is still lawfully due.

Most litigation is about locating the transaction on one side of that line or the other.

XXXV. The bottom-line legal positions

To distill the doctrine:

1. If the transaction is a sale of a motor vehicle on installment and the seller forecloses the chattel mortgage on the car sold:

The creditor is generally barred from recovering any deficiency. Any contrary stipulation is generally ineffective.

2. If the transaction is instead a genuine loan secured by a chattel mortgage over the vehicle:

The creditor may, in principle, recover the deficiency, provided the contract allows it and the creditor proves the balance properly, subject to defenses against illegal charges and irregular sale.

3. Labels are not decisive:

Courts may look into the substance of the arrangement.

4. Repossession alone does not answer everything:

The real issues are the nature of the transaction, the remedy elected, and the legality of the accounting and sale.

XXXVI. A practical legal synthesis

In Philippine car repossession disputes, the phrase “deficiency after foreclosure” cannot be answered by a simple yes or no in every case.

The strong buyer-protection rule is this: in installment sales of personal property covered by the Recto Law, foreclosure of the chattel mortgage bars deficiency recovery. That is the anchor doctrine.

But vehicle financing is often documented in ways that attempt to place the transaction outside that rule. Creditors may succeed where the arrangement is truly a separate loan secured by mortgage. Debtors may defeat deficiency suits where the “loan” structure is only a formal wrapper around what is really an installment sale.

Accordingly, the decisive inquiry is not merely whether the car was repossessed, but why, under what documents, by whom, and pursuant to which legal remedy.

XXXVII. Conclusion

Liability for deficiency after car repossession in the Philippines depends primarily on the difference between an installment sale governed by the Recto Law and a loan transaction secured by chattel mortgage.

If the transaction is the former and the creditor elected foreclosure of the chattel mortgage over the car sold, the creditor generally cannot collect the deficiency. This prohibition is rooted in public policy and cannot ordinarily be defeated by contract language.

If the transaction is the latter, a deficiency may still be collectible, but only upon proper proof and subject to the debtor’s defenses regarding accounting, notices, sale irregularities, excessive charges, and bad faith.

In short, the law does not simply ask whether the car was repossessed. It asks what the transaction truly was, what remedy was chosen, and whether the creditor is trying to recover more than the law permits.