A lien has been placed on my auto insurance. Is this legal?

I have recently received my discharge and when I renewed my auto insurance I noticed a notation on renewal that a lien has been placed on my auto by a Bank other than the one that financed my loan and am making payments to. Can this be legally done without my knowledge in advance ?

Posted from: Alberta

One Response to “A lien has been placed on my auto insurance. Is this legal?”

Doug Stuive, CA | Trustee | CIRP said...

If you did not pledge this vehicle as security to this creditor when you applied for financing then the only way this can happen is if your creditor was granted permission to do so through a Court Order. If your creditor took legal action against you for the unpaid debt and was granted a judgment they may have asked the judge to grant permission to file a lien on your assets. It is unlikely that you would not have been notified that there was a court hearing as they are required to mail you a Statement of Claim. However if you did not keep your creditors informed of your address then this may happen without your knowledge. As well if you did not attend a court hearing, an order can be made in your absence.
You should contact your bankruptcy trustee. If the creditor formed part of your bankruptcy estate and the lien was filed after the date of bankruptcy then this lien would need to be removed as all legal actions relating to claims in the bankruptcy should cease upon filing your bankruptcy assignment. Your trustee would have completed a PPSA search at the time of filing and should have noted if there was a lien at that time.