November 5th, 2014 by Questions
If I got a loan from a bank to buy a car (2000.00) and sold the car and do a bankruptcy, will the bank want the car or what will happen.
Posted from: Manitoba
November 05, 2014 at 9:55 am, Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said:
When you borrowed money from the bank to buy the car you will have given security to the bank for the loan. The security was likely a Chattel Mortgage which gives the bank an interest in the car. By selling that car without the permission of the bank you will have committed an offence under the Criminal Code of Canada commonly called “theft by conversion.” Further, having gone bankrupt you may have committed an offence under Section 198(1) (g) of the Bankruptcy and Insolvency Act. If you dispose of property that you obtained on credit and have not paid for it you may be guilty of this offence.
The bank will expect to get paid and they have several options. If their security was registered under the Personal Property Security Act they may have the right to seize the vehicle from whomever you sold the vehicle to. They may also have the police pursue charges for theft by conversion and ask the Court to impose a restitution order. You might be best advised to consult with your own lawyer.
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