loan/lease default
we bought a semi. personal circumstances beyond our control have made it almost impossible to continue to make the payments We had no collateral on the loan/lease with this company we just put money down. what if we default on the loan? we live in bc and the lease company is based out of ontario
Posted from: British Columbia
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.