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Motor Vehicle Loans & Debt in Alberta

The Law of Property Act legislation in the Province of Alberta provides for seize or sue remedies to a secured party (lender) where a default in payments occurs by a borrower under a Conditional Sales Contract (loan agreement or finance contract) where a secured party holds a purchase-money security interest (a form of lien) in the collateral (property), most commonly a motor vehicle.


The lender or secured party has one of two options for the recovery of monies owed under a Conditional Sales Contract where a default occurs in the loan payments by the borrower. The secured party may:


  • Seize the collateral and apply the sale proceeds to the loan. If there is a shortfall that remains owed, the secured party is prohibited from suing the borrower for the deficiency (shortfall) that remains owed on the loan.
  • The secured party may sue the borrower for the loan balance that remains owed to obtain judgment against the borrower. Thereafter, the secured party is prohibited from seizing the motor vehicle from the borrower.


The seize or sue provisions of the Law of Property Act are not straightforward. If you have defaulted in your payments under a motor vehicle loan that you obtained solely for the purchase of your motor vehicle, we strongly encourage you to contact Faber to review the finance contract in an effort to assess your exposure under the contract, review your options and determine whether a consumer proposal or personal bankruptcy restructuring plan is right for you.

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