Client Inquiry: Seize or Sue – Secured Loans in BC
Hello, I had come to see you a while back about questions regarding
bankruptcy. You may still have a file on me. I was hoping for one last piece
of advice. When I saw you your advice to me was to get rid of my car as I am
paying too much for it. I agree and am trying to unload the car. I found a
buyer for the car and was hoping the bank would settle but they have refused
and are causing me problems. I know in BC it is seize or sue and I even
wanted to voluntarily surrender the car but the bank is still being
difficult. What do I do? Just cut off payments from my bank basically? I am
worried they will try and garnish my wages. Any advice you have would be appreciated.
Yes, there is a seize or sue law in BC. Which means that a creditor can
seize a vehicle covered by their security, or opt to sue the debtor for the
full amount of the debt, but cannot do both. This means that if you stop
making the payments for the car, and if the secured creditors seizes the car
for non-payment, they cannot then come after you for any shortfall.
The best bet is to sell the car if it can be sold for more than the debt so
you can pay it off in full and get out of your financial obligation.
However, if the car is worth less than what the debt is for, and you decide
that you simply cannot afford to keep making the payments, then simply
stopping the monthly payments to the bank would certainly force their hands.
Generally it is in the best interest of the secured creditor (in this case
the bank) to repossess the car, but not always. They do have the option to
simply sue you for the full amount outstanding.
However, to ensure that this applies to you, make sure that the car is
actually seized and not simply surrendered to the dealer as this may not
make the definition of “seized” under the BC Personal Property Security Act.
We also suggest cooperating fully with any bailiff appointed to seize the
car and making sure that you remove your insurance plates before the car is
taken. You cannot cancel your insurance without having the plates to
surrender to ICBC and will be charged for ongoing insurance if you are on a
monthly financed insurance program.
The only way the bank can garnish your wages is if they first sue you for
the debt, and this would mean then that the car would be yours 100% debt
free. If the amount of the debt is too high for you to deal with, we can
assist you with a proposal to settle with the bank or even a personal
bankruptcy, but this would really be the last alternative. It is very
likely that once you stop paying for the car, they bank will come and get it
and you will not hear from them again.
Colleen Craig, CA, CIRP
C.E. Craig & Associates Inc
204-2736 Quadra Street
Solving Your Debt Puzzle
Thank you SO much for replying so quickly Colleen. That really clears it up
for me. It’s so stupid that they won’t settle for the amount I was offered
on the car because it is more then they will get at auction for it. Not to
mention less the charges of whatever it costs for them to seize the car.
But since they won’t do that I will just stop payment and hopefully they
just come seize the car
If I do need any further assistance I will let you know.
Again thank you for taking the time to reply to my email. You’ve made me
feel a bit better about this situation now.