Bankruptcy Kitchener Blog

I have met with a couple of people over that last week in our Kitchener office that are in a similar situation – that is, the bank has taken back a vehicle or a house and the result is a shortfall too large to manage.

For various reasons, many individuals find themselves in a predicament where they cannot make payments to their creditors, possibly resulting from employment interruptions for medical issues, injury, lay-offs, terminations, seasonal work, etc.  Once someone is unable to pay their debts, creditors look for ways to collect.  Debts related to vehicle loans and mortgages are secured and as such, the vehicle or house is pledged as collateral.  Therefore, after a period of time, the bank looks to seize or repossess the vehicle or house.  In order to stop this from happening, a sizable amount of money (for the payment arrears and any other costs) is required.  Failing this, the bank repossesses the asset and then sells it, and then if the amount received by the bank is not enough to pay the loan/mortgage, a shortfall results.  The bank will then look to collect on the debt.

Depending on the size of the shortfall, the ability to pay back the creditor may or may not be feasible.  From the individuals I met with this week, the result of the repossessed assets left them in a situation were they could not continue to pay their debts as the shortfall combined with all their other debts were too large to manage.  A consumer proposal or a personal bankruptcy are options to assist individuals get a fresh start financially and deal with their debts including the shortfall from a repossessed asset.

If you are facing a shortfall from a repossessed asset and want to discuss your options and plan for dealing with the debts, please e-mail us or call us at 310-PLAN.  I met with individuals at our Kitchener office located at 607 King Street West (in the plaza in front of Zeke’s Restaurant).