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Voluntary repossession of vehicle.

I gave back my new vehicle which I purchased 6 months ago voluntarily due to separation and not being able to pay all bills + house and support 2 children. Now my bank is saying that they will sell the car at auction and I am responsible for the difference – they will garnish my wages and put a lien on my house. My trustee did not tell me any of this. Could this really happen? I was trying to avoid doing a proposal or filing for bankruptcy by giving back the vehicle. I knew this would affect my credit rating, but the collateral for the car was the car. Could you please send an answer asap.

Posted from: Ontario

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One Response to “Voluntary repossession of vehicle.”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

From the sounds of it, the bank is correct. You can’t simply return the car without any penalty.

Now the shortfall on this debt will be cleared by the filing of a bankruptcy or a consumer proposal, so the trustee was likely explaining things that would happen if you filed either of these, but in the absence of one of these legislated options this will definitely be an amount you are responsible for.