In this case, the debtor would receive the excess $5K (surplus) which he would use to satisfy the debts of his unsecured creditors (and then would have $3K left over). 2) The dealership repossess the car and sells it for less than the amount of the debt, let's say $9K (more likely scenario).
In this scenario, the debtor receives the surplus of $5K (surplus), which he uses to pay off his unsecured creditors. The dealership repossesses the car and sells it for a lower price than the debt.