Bankruptcy Alberta, Canada

A secured creditor is a creditor to whom you have either given 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 loan, the vehicle you own may be taken as collateral against the loan.

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 also take collateral on a vehicle, if you have one, and 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.

Should you wish to keep the asset you placed 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 Trustee can stop the seizure.

If you keep the 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 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.

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.