Wisconsin Statutes
Wis. Stat. § 425.209 (2026)
Restrictions on deficiency judgments
✓ current as of July 2026
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425.209(1)(1) This section applies to a deficiency on a consumer credit sale of goods or services and on a consumer loan in which the lender is subject to defenses arising from sales (s. 422.408); a customer is not liable for a deficiency unless the merchant has disposed of the goods in good faith and in a commercially reasonable manner.
425.209(2)(2) If the merchant repossesses or accepts voluntary surrender of goods which were the subject of the sale and in which the merchant has a security interest, the customer is not personally liable to the merchant for the unpaid balance of the debt arising from the sale of a commercial unit of the goods of which the amount owing at the time of default was $1,000 or less, and the merchant is not obligated to resell the collateral unless the customer has paid 60 percent or more of the cash price and has not signed after default a statement renouncing the customer’s rights in the collateral.
425.209(3)(3) If the merchant repossesses or accepts voluntary surrender of goods which were not the subject of the sale but in which the merchant has a security interest to secure a debt arising from a sale of goods or services or a combined sale of goods and services and the amount owing at the time of default was $1,000 or less, the customer is not personally liable to the merchant for the unpaid balance of the debt arising from the sale, and the merchant’s duty to dispose of the collateral is governed by the provisions on disposition of collateral under chs. 401 to 411.
425.209(4)(4) If the lender takes possession or accepts voluntary surrender of goods in which the lender has a security interest to secure a debt arising from a consumer loan in which the lender is subject to defenses arising from sales (s. 422.408) and the amount owing at the time of default of the loan paid to or for the benefit of the customer were $1,000 or less, the customer is not personally liable to the lender for the unpaid balance of the debt arising from the loan and the lender’s duty to dispose of the collateral is governed by the provisions on disposition of collateral under chs. 401 to 411.
425.209(5)(5) The customer may be liable in damages to the merchant if the customer has wrongfully damaged the collateral or if, after judgment for the creditor has been entered in a proceeding for recovery of collateral under s. 425.205, the customer has wrongfully failed to make the collateral available to the merchant.
425.209(6)(6) If the merchant elects to bring an action against the customer for a debt arising from a consumer credit sale of goods or services or from a consumer loan in which the lender is subject to defenses arising from sales (s. 422.408), when under this section the merchant would not be entitled to a deficiency judgment if the merchant took possession of the collateral, and obtains judgment:
425.209(6)(b)(b) The collateral is not subject to levy or sale on execution or similar proceedings pursuant to the judgment.
425.209 AnnotationProof of disposal of goods in accordance with sub. (1) must be made by a merchant to obtain a deficiency judgment. Failure to do so need not be asserted as an affirmative defense. Shoeder’s Auto Center, Inc. v. Teschner, 166 Wis. 2d 198, 479 N.W.2d 203 (Ct. App. 1991).
425.209 AnnotationConsistent with Shoeder’s Auto Center, 166 Wis. 2d 198 (Ct. App. 1991), in order to make a prima facie case for summary judgment for a deficiency judgment, the merchant is required to present evidence demonstrating that the collateral was disposed of in a commercially reasonable manner. Gemini Capital Group, LLC v. Jones, 2017 WI App 77, 378 Wis. 2d 614, 904 N.W.2d 131, 16-2123.
Notes of Decisions
Cited in 7
cases (2 in the last 5 years), 1991–2025 · leading case: Gemini Capital Grp., LLC v. Jones, 2017 WI App 77 (Wis. Ct. App. 2017).
Gemini Capital Grp., LLC v. Jones, 2017 WI App 77 (Wis. Ct. App. 2017). “Jones argues the circuit court improperly granted summary judgment in Gemini's favor because: (1) Gemini failed to establish its ownership of the debt; (2) Gemini failed to prove the collateral at issue was sold in a commercially reasonable manner, as required by Wis. Stat. §…”
Burney v. Thorn Americas, Inc., 944 F. Supp. 762 (E.D. Wis. 1996). “Wis.Stat. § 425.209(2): If the merchant repossesses or accepts voluntary surrender of goods which were the subject of the sale and in which he has a security interest, the customer is not personally liable to the merchant for the unpaid balance of the debt arising from the sale…”
Shoeder's Auto Ctr., Inc. v. Teschner, 479 N.W.2d 203 (Wis. Ct. App. 1991). “, because Shoeder's did not prove that it disposed of the car pursuant to sec. 425.209(1), Stats. We conclude that under sec.”
McFarland State Bank v. Sherry, 2012 WI App 4 (Wis. Ct. App. 2011). “§ 425.209, remaining after foreclosure of any mortgage or security interest securing Indebtedness.”
Burney v. Thorn Americas, Inc., 970 F. Supp. 668 (E.D. Wis. 1997). “§ 425.209. Apparently, the WCA gives customers the terminability that Rent-a-Center claims does not exist in their installment sales agreements.”
Creative Fin., Inc. v. Carlos Rangel (Wis. Ct. App. 2025). “§ 425.209 does not impose any “prohibition” on 6 No.”
Daniel Birge v. Simplicity Credit Union (Wis. Ct. App. 2025). “” See also § 425.209(1) (stating that “a customer is not liable for a deficiency unless the merchant has disposed of the goods in good faith and in a commercially reasonable manner”).”
— Wis. Stat. § 425.209(1) — 4 cases
Gemini Capital Grp., LLC v. Jones, 2017 WI App 77 (Wis. Ct. App. 2017). “Jones argues the circuit court improperly granted summary judgment in Gemini's favor because: (1) Gemini failed to establish its ownership of the debt; (2) Gemini failed to prove the collateral at issue was sold in a commercially reasonable manner, as required by Wis. Stat. §…”
Shoeder's Auto Ctr., Inc. v. Teschner, 479 N.W.2d 203 (Wis. Ct. App. 1991). “, because Shoeder's did not prove that it disposed of the car pursuant to sec. 425.209(1), Stats. We conclude that under sec.”
Creative Fin., Inc. v. Carlos Rangel (Wis. Ct. App. 2025). “§ 425.209 does not impose any “prohibition” on 6 No.”
Daniel Birge v. Simplicity Credit Union (Wis. Ct. App. 2025). “” See also § 425.209(1) (stating that “a customer is not liable for a deficiency unless the merchant has disposed of the goods in good faith and in a commercially reasonable manner”).”
— Wis. Stat. § 425.209(2) — 2 cases
Burney v. Thorn Americas, Inc., 944 F. Supp. 762 (E.D. Wis. 1996). “Wis.Stat. § 425.209(2): If the merchant repossesses or accepts voluntary surrender of goods which were the subject of the sale and in which he has a security interest, the customer is not personally liable to the merchant for the unpaid balance of the debt arising from the sale…”
Creative Fin., Inc. v. Carlos Rangel (Wis. Ct. App. 2025). “§ 425.209 does not impose any “prohibition” on 6 No.”
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