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Ulysses101, Lawyer
Category: Canada Law
Satisfied Customers: 3520
Experience:  11 years experience in Canada family law, plus criminal, civil, and employment
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If my car was taken as a repo and the bank sold at auction

Customer Question

if my car was taken as a repo and the bank sold at auction for less than what i owe them
do i have to pay them the remaining amount??
Submitted: 1 year ago.
Category: Canada Law
Expert:  Ulysses101 replied 1 year ago.


Cars depreciate, often dipping in value below what's owed on them still. And selling at an action usually recoups less than the optimal sale price as well.

The car is a security on the debt. If the car is repossessed, that doesn't erase the debt.

Look at it from the perspective of real estate. It often happens that when a home owner doesn't pay the mortgage for consecutive months then the bank will foreclose. Maybe the principle of the mortgage amount is higher than the value of the home; this happened a lot a few years ago due to sub-prime lending. The amount owed to the bank is reduced by the amount which the bank sells the home.

Let's say that my home is worth a half mil, and I have a $100,000 mortgage which I can't pay. The bank can seize the home and sell it, take their $100,000 and then they still have to give me back the rest.

I'm sorry that this isn't the answer you wanted to hear, but please don't shoot the messenger. You came her for information. If there's more to discuss then please reply. If I've answered you, I'd appreciate a positive service rating please.

Customer: replied 1 year ago.
The have it as paid on my credit report and now they saying that it will go to a collection agency if I don't pay the full amount in a month
Can they do tha
Customer: replied 1 year ago.
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Expert:  Ulysses101 replied 1 year ago.

Yes, they can do that. If you owe $8,000 for a car loan with the car a collateral, they seize the car and sell it for $5,000, you still owe them $3,000. They can report this to credit agencies and take you to court for it.

Customer: replied 1 year ago.
But they already put it as paid on my credit report like 2 years ago
Expert:  Ulysses101 replied 1 year ago.

At that point, it was paid but you owed on the loan still. I'm afraid that posting something with a credit agency isn't proof of payment, nor is it proof of a debt.

Expert:  Ulysses101 replied 1 year ago.

Anything else about this to discuss?

Expert:  Ulysses101 replied 1 year ago.

I'm not sure if you've had a chance to read our discussion. Is there more to talk about? Any new developments? I'm still here.