Seize or Sue BC – Will my Secured Creditor Sue Me or Seize My Vehicle

Seize or Sue Rules and Law in BC on vehicles – Will  my Secured Creditor Sue Me or Seize my Vehicle?

Will my secured creditor seize my car?

Seize or Sue Laws in BC, C.E. Craig & Associates Licensed Insolvency Trustees

Hello Colleen,

I have a few questions about the Seize or Sue rules in BC regarding my vehicle. Here’s my story.  I have a 2016 Dodge Ram truck that has very expensive payments and I can no longer afford to pay them. We just found out that we are having another baby (3rd child), and the welfare of my children and family are way more important to me!!

so, I am aware in BC that they can only seize or sue a vehicle but cannot do both!! with this being said i have a few questions.

  • I have tried calling the bank where my loan is through, to see if they could help me try to extend the loan or if i have any other options. Unfortunately their is nothing they can do to help me so my only option is to let them take the truck.

First Answer: Congratulations on the new baby!   Yes, this is always a first step – try direct negotiating with your creditors.

  • Do i just park the truck and let them come and take it? How do I know if the bank is going to seize or sue me?  What are the rules?

Second Answer: Yes, we get this question quite often.  The secured creditor (the Bank) at times can move quite slowly.  The big question is the insurance.  If the keep the insuring the vehicle, and stop making payments, they in time will most likely come and seize it.  If something happens to the vehicle while you are parked, then your insurance will cover any repair costs.

If you have no current insurance, if it is parked in your driveway it may be that your house insurance will extend to the parked car. (this is a specific rider in your house policy – you should check to be sure)  If you do not want to (or unable to pay for the insurance any longer), you should inform the secured creditor of this fact.  In your case the vehicle is worth quite a bit, so they would be motivated to come and get it.  If you park a vehicle on a city street without insurance, you car will be ticketed and towed by the police.  So if you are parking an uninsured vehicle on the street, the secured creditor should be made aware of this fact as well – otherwise they may have to pay to get the car out of the impound yard.

But once again, if you actually have not insured the vehicle you are on this hook.  So if something happens to eliminate/reduce the value of the car, you are, for sure, going to be sued by the company (as there will be nothing of value that they can seize so might just choose to sue)

  • What is my best option for my banking, do i close my account or just stop payments?

Third Answer:  It is up to you.  You can talk to your bank and let them know that you are no longer making payments.  It will depend on the institution. – if TD Finance financed the vehicle, and you have  TD account, they retain the right to scoop money out of your account (same institution).  If it is a separate institution, TD vs. GMC Financing, they just putting a stop payment at your branch will usually work (along with contacting GMC).  But this can be time consuming and no guarantee that it will stop (accidents happen). The decision to seize or sue depends on the value of the vehicle and it up to the bank to decide.

To be 100%, you can close your account and change banks.

  • If they call me do i answer the phone and what do i say? because i know you are not suppose to voluntarily tell them to come and get the vehicle. So if they call what do i say or do? should i change my number? will they know where the truck is parked and where to get it from?

Fourth Answer: It is always best to deal with your creditor directly and not avoid them.  You want to cooperate to help speed up the process. You tell them you have stopped making payments and will not be making any more.  You tell them they are free to come and collect they vehicle, tell them where it is, and that you will happily make the keys available when the bailiff comes to seize the vehicle.

  • I obviously will need some other car to drive. If i can get into a new car before i decide to stop paying for the truck, can they come and take the new vehicle too? (i have already been approved for another car, but don’t want to make a wrong decision)

Fifth Answer: The secured creditor, lest say GMC, can only come after the specific vehicle that you have pledged as security on that one specific loan.  If you are able to secure another vehicle with a separate loan lest say with TD, then only TD can seize the new vehicle.  GMC cannot come after any other vehicle that is pledged as security (unless there is more than $5000 in equity in that other vehicle) but they have to go through the court first.  Tthis is a different discussion re: Judgements.

  • If i have a visa from this same bank institution can they take it away or cancel the card? or is it separate?

Sixth Answer:  Yes, so if TD is your secured creditor and you have a TD Visas, they are completely separate.

  • What are the chances they will sue? I don’t own a house or have any Assets. We have a trailer in the States with mine and my husbands name on it…would they go after that?

Seventh Answer:  Given what you have told me, I would guess that they are very likely to seize the vehicle as it is new and presumably worth quite a bit.  If they opt to sue, you are free to sell the vehicle yourself and the proceeds can be used to pay down the debt.

  • Question about the insurance. If I put storage insurance on it is that ok ? If I get a new car I will have to transfer my insurance from the truck and was just going to park it and put storage insurance on in case something do happen to it… What are the chances they would go after a new vehicle through court? That’s my biggest concern right now is getting a new car and they take it away 🙁

Answer: So, if the truck is worth $16,000 and you owe $20,000, if they choose to seize the truck, you will not owe them anything else.  However, if they opt to sue you, the truck can be sold by you for $16,000 and then you would be personally responsible for the remainder or $4,000.  If you do not pay them their $4,000, they can take you to court to try to force you to pay this amount and if the court agrees that you owe the debt, they can garnish your wages (the most likely) or seize assets (not as likely).

However, they would negotiate with you to allow you to make payments on the $4,000.

  • If their is any other information that I need to know, I would appreciate any feedback you may have!

A:  You are welcome – good luck.  I think it should be fine.

Other Posts on this Topic

Seize or Sue in BC PPSA rules

FAQ: Seize or Sue in B.C

Ask A Trustee: Voluntary Surrender vs. Seize or Sue

Can I keep My Leased Car?

Seize Or Sue- Secured Loans

Colleen

 

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