How does the seize or sue law in British Columbia work for vehicles? I have a car for which I can no longer afford the payments. If I turn the car into the leasing company will the seize or sue law be in effect so I will not have to pay any shortfall on the sale of the vehicle?
Turning the car over to the leasing company will not trigger the seize or sue provision. Therefore, if you do this, you will still be responsible for any shortfall on the sale of the vehicle.
Other Provinces – In other provinces or if the financing company will not seize the BC or Alberta vehicle, giving up a leased vehicle in bankruptcy, will erase the all the debt. You will have to give up the vehicle.It is important to follow your trustee’s directions on turning the vehicle over to the financial company:
- Write to the financing company to advise them of your bankruptcy and tell them you are not going to carry on with the lease. Advise them where to pick up the vehicle and when the insurance will expire;
- Your trustee will also write to the leasing company;
- Don’t use the vehicle;
- Don’t make any payments on the vehicle. If you do that will reinstate the contract and the debt and the obligations to make payments will continue.
Earl Sands, LIT