The following question was asked via CECraig.com:
Subject: Car Repossession
Question: Seize or Sue in BC under PPSA legislation
Hello. I’ve just gotten news from the lender bank that my car is scheduled for repossession this week. The bank is in Alberta but the car is registered and insured here in BC. During the phone call the representative stated that the car will go up for auction and we will have to pay whatever the difference is between the auction price and what we still owe on the car. I thought in BC they could seize or sue but not do both? Will we be held accountable for the shortfall?
Response from Trustee
Hello Mrs. Worried
I want to let you know that I am not a lawyer and don’t give legal advice but I can outline for you though my experience as an insolvency professional and trustee in bankruptcy.
Yes, there is indeed a rule in BC regarding vehicles and the “seize or sue” under the PPSA or Provincial Property Security Act. This means that if a creditor repossesses a private vehicle then they cannot proceed against you for the shortfall.
There is an exception to this rule, where if someone has acted as a “guarantor” of the car payments, then they can be held personally liable for any shortfall. This is different from being the principle debtor under a standard loan contract.
So, different provinces have different provincial legislation covering consumer rights. There is also PPSA legislation in Alberta but it is different from that of BC so when people relocate, it can cause some difficulties. The determining factor as to which provincial legislation applies depends on where the car was registered and if the lender knew, or had sufficient time to acknowledge, the location of the car; it does not depend on where the bank is located.
So, as you indicate, If the vehicle was registered in BC (for greater than 3 months) and the creditor knew that you had relocated to BC, or even that you have lived here the whole time, then the BC PPSA rules apply to this seizure and thus the seizing creditor cannot proceeds against you for the shortfall. They may try, or even try to convince you that they can proceed in BC, but based on the foregoing, they cannot.
The question becomes a bit dicier if you had recently located to BC and the secured creditor did not have sufficient notice to register their interest is BC. If this is the case, it may be that they have a claim against you for the shortfall depending on the rules of the Alberta PPSA legislation. I don’t practice in Alberta, so not as familiar with that legislation, but that is my current understanding.
Hopefully this is some comfort to you.
Colleen Craig, CA, CIRP
C.E. Craig & Associates Inc.
204-2736 Quadra Street
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