Comments on: loan/lease default http://www.bankruptcy-canada.ca/money-management-and-problems/2008/12/loanlease-default.html Personal Bankruptcy Canada Blog Fri, 10 Feb 2012 15:23:44 +0000 hourly 1 By: Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy http://www.bankruptcy-canada.ca/money-management-and-problems/2008/12/loanlease-default.html#comment-80979 Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy Tue, 30 Dec 2008 14:09:35 +0000 http://www.bankruptcy-canada.ca/money-management-and-problems/2008/12/loanlease-default.html#comment-80979 This partially depends on the type of contract you signed, but under normal circumstances the lease company will first repossess the Semi and any costs of doing so will be first covered by the sale proceeds. Once this is done and the vehicle is sold, any proceeds after the repossession and sales costs will be credited against the outstanding loan. Typically due to depreciation this isn't sufficient to cover the entire balance of the lone, so the remaining amounts outstanding you are then personally responsible for. This remaining balance, if you are not cooperative and do not continue to make payments on this shortfall, will typically result in a garnishee. The only real ways to protect yourself from a garnishee are to: a) pay the amount as demanded by the creditor; b) offer payments through a debt management plan; c) file for bankruptcy; d) file a consumer proposal; If you have any further questions you are best to contact a <a href="http://www.bankruptcy-canada.ca/emailUs.htm" rel="nofollow">local trustee</a> as they will be able to examine the specifics of your situation and suggest the advantages and disadvantages of each approach given your current circumstances. This partially depends on the type of contract you signed, but under normal circumstances the lease company will first repossess the Semi and any costs of doing so will be first covered by the sale proceeds. Once this is done and the vehicle is sold, any proceeds after the repossession and sales costs will be credited against the outstanding loan. Typically due to depreciation this isn’t sufficient to cover the entire balance of the lone, so the remaining amounts outstanding you are then personally responsible for. This remaining balance, if you are not cooperative and do not continue to make payments on this shortfall, will typically result in a garnishee.

The only real ways to protect yourself from a garnishee are to:

a) pay the amount as demanded by the creditor;
b) offer payments through a debt management plan;
c) file for bankruptcy;
d) file a consumer proposal;

If you have any further questions you are best to contact a local trustee as they will be able to examine the specifics of your situation and suggest the advantages and disadvantages of each approach given your current circumstances.

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