Search site            Home     About us     Contact us     Ask an expert     Forms     Corporate recovery      

       


Expert advice

For help managing your debts, call us toll free in Calgary, Edmonton and throughout Alberta at 310-8888 for a free, no obligation, confidential consultation.

In person:
Mon to Fri: 8am-4:30pm.

Over the phone:
Mon to Fri: 7am-5pm
Sat & Sun: 9am-3pm

 

Secured creditors

A secured creditor is a creditor to whom you have either given up one of your assets as collateral to obtain a loan or mortgage or you needed a loan or mortgage to obtain the asset. For example, when you purchase a home, it is used as collateral for the mortgage or if you obtain a vehicle loan, that vehicle is collateral against that loan. This may also be referred to as a 'pledged asset'.

Quite often, when you obtain a loan directly from a company such as Citifinancial, Household Finance or Trans Canada Credit, they will grant the loan but will also take collateral on a vehicle (if you have one) and/or your household furnishings. Usually a purchase through Future Shop, Soundsaround, etc, which is financed by one of these lenders does not have collateral attached to it.

» More Grant Thornton videos

Secured creditors do not lose their right to a pledged asset if you go bankrupt or make a proposal. Should you wish to keep the asset you pledged as collateral, you must continue to pay the secured creditor even if you have filed bankruptcy or a proposal or have entered the Orderly Payment of Debt Program. Most creditors will allow you to continue paying, but only if your payments are up to date at the date you enter the program. Some secured creditors may seize the asset upon bankruptcy and neither you nor the Licensed Insolvency Trustee can stop the seizure once the creditor has proved their claim.

If you choose to keep the pledged/secured asset but find the monthly payment is too high, we suggest you contact the creditor in an attempt to renegotiate a lower interest rate or to spread your payments over a longer period of time. Sometimes a creditor will do it for a short period of time and others will do it for the term of your contract.

If you have a secured asset that you do not wish to keep, it will usually be returned after the filing of the bankruptcy or proposal. Any deficiency or balance outstanding after the return of the asset will be included in your bankruptcy, proposal, or Orderly Payment of Debt Program.

Often when household furnishings are secured and the value of the furnishings is significantly less than the loan amount, the secured creditor may re-write the loan for the value of the assets. This decision is up to the lender, but if they agree, a debtor may sign a new loan document after bankruptcy and the balance written off will be discharged by the bankruptcy. One word of caution: If you decide to retain financed assets and then decide later, after bankruptcy, that you would like to return the asset, any shortfall to the creditor may well have to be repaid as a post bankruptcy debt.

Finally, no debtor should make arrangements to reaffirm a loan and retain an asset until the secured creditor has filed a claim with the Trustee and the Trustee has confirmed that the Trustee has no interest in the asset.

If you are unsure whether a creditor has collateral against your assets you can do a Personal Property Registry search at any Alberta registry office under either your full legal name or the serial number of the asset that you believe is secured. If the secured creditor's name appears on the personal property search, assume they have the asset as collateral.

As this is a complex area and very dependent on the actual agreement between the debtor and creditor, the jurisdiction in which it is made and the particular facts, consumers are cautioned to seek professional advice with regard to their particular situation.

We can help

If you are in debt and considering filing bankruptcy, filing a consumer proposal, or some other debt help solution, please contact us toll free in Alberta at 310-8888 for a free consultation.

Our Licensed Insolvency Trustees (formerly called Trustee in Bankruptcy or Bankruptcy Trustee) and Estate Managers believe everyone deserves a financial fresh start, while being treated with dignity and respect. We have offices conveniently located in Calgary, Edmonton, throughout Alberta, and across Canada.

» Credit card debt

 

Calgary
833 - 4 Ave SW, Suite 900
Calgary Alberta T2P 3T5
T 310-8888
3 other Calgary locations
13 Alberta locations

Edmonton
1701 Scotia Place Tower 2
10060 Jasper Avenue
Edmonton, Alberta T5J 3R8
T 310-8888
3 other Edmonton locations
13 Alberta locations

 

All locations
310-8888

bankruptcy blogFacebookLinkedin 

© 2011 Grant Thornton Limited • All rights reserved


back to Bankruptcy Alberta home

Confidential callback from one of our Trustees

Please call me

As soon as possible
Today at
Next business day at

My Phone # 

Extension  

Email  

Ask for  

×


back to Bankruptcy Alberta home

Make an appointment

Name

Phone
- -

Email

Preferred Date (dd/mm/yy)

 


Location

×

×