The following question was asked via CECraig.com:
Subject: seize or sue in bc – PPSA rules
I have a vehicle that I cannot make payments on anymore. I understand that there is a seize or sue in BC (under PPSA rules) that may affect me? I have notified the dealership that holds the in-house finance promissory note and need to know what happens if they decide to sue me instead of seize the car. If they tell me that I am going to be sued< do I own the car outright at that point? or do they still own the car until the end of the court case?
Hello Confused BC
With respect to your vehicle and the seize or sue rules, if you reside in BC and your car is registered in BC, then the “seize or sue” rule applies to you. If you dealership decided to “sue” you rather than “seize” the vehicle, then their security is no longer valid. A secured creditor, in order to enforce their security against third parties, like a bankruptcy trustee other creditors, must register their interest under the provincial Personal Property Security Registry- PPR (per the PPSA rules – Personal Property Security Act) Once registered, then there is a “secured lien” on your vehicle which alerts anyone looking into ownership of that vehicle to see that there is a prior charge.
Once they have opted to sue you, then this charge, it is no longer valid and you are free to deal with the car as if there were no charges. So, long windy answer that yes, if you are sued (served court Notice is sufficient), then you will own the car without any liens (the car will always be in your name even if you have a secured charge – only exception to “ownership” is if you are leasing the vehicle, where it is usually registered in the leasing company’s name) . Now, the registration under the PPSA rules in BC, the registration does not automatically disappear and you may have to do things to have the charge removed. (Send a demand letter for instance)
Why do you care if there is security registered against the vehicle? This would be of interest to you because if you wanted to sell that car, someone coming along to buy it would want to make sure that there were no liens registered under the PPSA rules because if there were registered liens (that were properly registered and enforceable) then the liens would move along with the car no matter who is the registered owner. This is one reason why if you are purchasing a vehicle personally you should do a PPR search to ensure that you vehicle of choice doesn’t have any such charges. Unwitting consumers can be ripped off if they purchase a vehicle that has a charge as the charge owner has the right to repossess the vehicle notwithstanding that you may have purchased it in good faith (and paid good money). If you paid for a vehicle that was subsequently repossessed by a secured creditor, you only recourse would be to sue the person that sold you the vehicle in the first place, and they may be long gone or even declared personal bankruptcy which would mean you would lose the ability to proceed against that person in the courts.
Hopefully this answers your questions
Colleen Craig, CA, CIRP
C.E. Craig & Associates Inc.
204-2736 Quadra Street
Solving Your Debt Puzzle