State Farm Bank & Afni $110M Repossession Settlement, Cash, Debt Write-Off & Credit Relief

State Farm Bank FSB, Afni Inc., and three related loan companies agreed to pay $110 million to settle a class action lawsuit alleging they repossessed and sold borrowers’ vehicles and property without sending the legally required repossession notices. If one of these companies repossessed your property and sent you both a presale and post-sale repossession notice, you may qualify for automatic cash payment, full deficiency debt write-off, and credit reporting relief — no claim form required. The opt-out deadline is April 23, 2026.

Quick Facts

Current Status and What Happens Next

• Preliminarily approved — the court has given conditional approval and the settlement administrator is identifying class members using the defendants’ loan and repossession records.
• Opt-out deadline: April 23, 2026 — if you want to exclude yourself from the settlement and preserve your right to sue the defendants independently, you must mail a signed opt-out letter before this date.
• Final fairness hearing: May 6, 2026 — if the court grants final approval, the settlement administrator will distribute cash payments within 30 days after the court resolves any appeals.

What Is the State Farm Bank and Afni Repossession Lawsuit About?

Plaintiff Thuy Martinez and other borrowers filed the class action lawsuit Afni Inc. v. Thuy Martinez, et al., Case No. 23SL-AC00070-01, alleging State Farm Bank FSB, Afni Inc., and affiliated loan entities violated statutory notice requirements when they repossessed and sold borrowers’ vehicles and other collateral. Under state law, lenders and debt collectors who repossess property must send specific required notices — both before the sale and after the sale — that explain the borrower’s rights and the details of the repossession. Plaintiffs argued the defendants sent legally defective notices that failed to meet these statutory requirements.

The lawsuit covered loans that were originated with State Farm Bank FSB and later transferred to or collected by Afni Inc. — a debt collection company — or to the EMVLP entities, which are loan portfolio companies that purchased State Farm Bank loan accounts. Many affected borrowers received collection letters from Afni Inc. after State Farm Bank transferred or sold their accounts, and then had their vehicles repossessed under those transferred loan agreements.

All five defendants denied any wrongdoing. They agreed to the $110 million settlement to avoid the cost and uncertainty of continued litigation.

Who Is Eligible for the Settlement?

The settlement administrator identifies class members automatically using loan and repossession records. You do not need to submit a claim form. However, you should understand whether you qualify:

• You may qualify if you secured a collateralized loan or financing agreement with EMVLP LLC, EMVLP II LLC, Twenty-One Eighty-Five LLC, State Farm Bank FSB, or Afni Inc.
• You may qualify if one of these companies repossessed your collateral — such as a vehicle or other property — under that loan agreement.
• You may qualify if one of these companies mailed you both a presale notice and a post-sale explanation in connection with the repossession and sale of your property.
• You may qualify if your loan was originally with State Farm Bank FSB and was later assigned or transferred to one of the other defendants.
• You do not qualify if you received both a presale notice and a post-sale explanation before July 25, 2017.
• You do not qualify if State Farm Bank obtained a final deficiency judgment against you in court.
• You do not qualify if you filed for bankruptcy after the date on your presale notice and your bankruptcy ended in a discharge rather than a dismissal.

If you believe you qualify but have not received notice, contact American Legal Claim Services at 1-800-351-1696.

Related article: GSX Techedu Securities $9.5M Stock Class Action Settlement, Did You Lose Money on GSX Stock?

What Benefits Can You Receive?

This settlement provides three separate types of relief. Eligible class members receive all three automatically — no forms or action required.

Benefit 1 — Cash Payment Each eligible class member receives a pro rata share of the $35 million cash fund. The settlement administrator calculates your individual share using this formula:

(10% of your amount financed + your finance charge) ÷ (10% of total amount financed for all class members + total finance charge for all class members) × net distributable settlement fund

In plain terms: the larger your original loan and finance charges, the larger your pro rata share of the cash fund. The exact individual payment amount depends on the total number of eligible class members and final deductions from the fund.

Benefit 2 — Deficiency Balance Write-Off If you still owe a deficiency balance — meaning the amount the defendants claim you still owe after they repossessed and sold your property — that entire balance will be completely written off. The defendants will cancel this debt as part of the settlement. The estimated total value of deficiency write-offs is $75 million.

Benefit 3 — Credit Reporting Relief The defendants will request that Equifax, Experian, TransUnion, and Innovis delete all negative credit reporting information related to your repossessed account. This means derogatory entries connected to the repossession — such as collection accounts, charge-offs, or deficiency balances — should be removed from your credit reports across all four major bureaus.

Settlement fund breakdown:

How Will You Receive Your Payment?

Because no claim form is required, here is exactly what happens automatically:

Step 1 — The settlement administrator uses the defendants’ loan, repossession, and notice records to identify all eligible class members.

Step 2 — The administrator mails a check to your last known address on file with the defendants. The administrator will use postal databases to update any outdated addresses before mailing.

Step 3 — If your check is returned as undeliverable, the administrator will attempt to locate your new address and re-mail the check.

Step 4 — The defendants simultaneously request deletion of negative credit reporting entries related to your account from Equifax, Experian, TransUnion, and Innovis.

Step 5 — Any outstanding deficiency balance the defendants claim you owe is canceled and written off — you will receive written confirmation of the write-off.

Step 6 — Cash your check promptly — checks become void after 120 days from the date of issue. If you do not cash your check within 120 days, you will lose your payment.

No action needed — but make sure your mailing address is current. Contact American Legal Claim Services at 1-800-351-1696 if you need to update your address.

Important Deadlines and Dates

Frequently Asked Questions

Do I need to file a claim form to receive my payment?

 No. This settlement does not require a claim form. The settlement administrator automatically identifies eligible class members using the defendants’ loan and repossession records and mails checks to your last known address. You only need to act if you want to opt out of the settlement or object to its terms before April 23, 2026.

Is this State Farm Bank and Afni settlement legitimate?

 Yes. The settlement, Afni Inc. v. Thuy Martinez, et al., Case No. 23SL-AC00070-01, is a court-supervised class action. The settlement is preliminarily approved and the official settlement website is sfbnoticeclass.com, administered by American Legal Claim Services LLC. Contact the administrator at 1-800-351-1696 to verify any communication you receive.

When will I receive my cash payment?

 The final fairness hearing is scheduled for May 6, 2026. If the court grants final approval and no appeals follow, the settlement administrator will mail checks within 30 days after that process concludes. Cash your check promptly — it becomes void after 120 days from the issue date.

What if I miss the April 23, 2026 opt-out deadline?

 If you do not opt out by April 23, 2026, you automatically remain in the settlement class. You will receive all three benefits — cash payment, deficiency write-off, and credit reporting relief — but you give up your right to sue State Farm Bank, Afni, or the EMVLP entities separately over the claims this settlement covers.

Will my settlement payment affect my taxes? 

Settlement payments related to debt write-offs may have tax implications. The IRS generally treats canceled debt as taxable income — your deficiency write-off could result in a Form 1099-C being issued. Cash payments may also be taxable depending on how they are classified. Consult a qualified tax professional to understand how this settlement affects your specific tax situation.

What is a deficiency balance and how does the write-off help me? 

A deficiency balance is the amount you allegedly still owe after your vehicle or property was repossessed and sold for less than your outstanding loan balance. For example, if you owed $12,000 and the lender sold your vehicle for $7,000, your deficiency balance would be $5,000. Under this settlement, the defendants agree to completely cancel and write off that remaining balance — you will no longer owe it and they cannot collect it.

What happens to negative items on my credit report? 

As part of the settlement, the defendants will request that all four major credit bureaus — Equifax, Experian, TransUnion, and Innovis — delete negative credit reporting entries related to your repossessed account. This can remove collection accounts, charge-offs, or deficiency balance entries that may be dragging down your credit score. Allow several weeks after final approval for the deletions to appear on your reports.

What if I already paid my deficiency balance? 

The settlement benefits cover outstanding deficiency balances the defendants currently claim you owe. If you already paid your deficiency balance in full, you will not receive a write-off for amounts already paid, but you may still receive a pro rata cash payment from the $35 million fund and credit reporting relief. Contact the settlement administrator at 1-800-351-1696 with questions about your specific account.

Sources and References

1. Official Settlement Website — sfbnoticeclass.com
2. Settlement FAQ — sfbnoticeclass.com/page/faq

If you have outstanding debt with other collection agencies, understanding your rights under federal law can help protect you. Read our guide on Midland Credit Management debt collection class action lawsuit settlement payments and deadlines for a related example of how collectors can be held accountable. If you have questions about how sold debt and deficiency balances work legally, our guide on what happens when your debt is sold to a collection agency explains your rights in plain English.

Last Updated: March 14, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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