Can you surrender your car

Posted in Creditor Actions. Cars — coupes, sedans, sport utility vehicles, trucks. Roughly two-thirds of the people who file insolvency with us own a vehicle.

The vast majority want to keep their car when they file a consumer proposal or bankruptcy, but there are times when it makes more sense to give it back. There are lots of reasons why people decide to voluntarily give their vehicle back to a finance company when they file for insolvency. Here is how a voluntary surrender works and what happens to the debt. If you have a secured car loan or lease, the lender or finance company has the right to repossess your vehicle if you fall behind on your payments.

You can voluntarily surrender the vehicle to your lender or dealership on your own. To make a voluntary repossession, you notify your lender you will no longer make payments and wish to return the car. Your lender may ask you to drop the vehicle off at an agreed time and place, or they may send someone to repossess the vehicle from you. After repossession, the lender will sell the vehicle and send you a statement of realization.

Included in this statement will be a calculation of how much you still owe called the deficiency or shortfall. This number represents the difference between how much loan was remaining on the vehicle and how much the car was sold for. Your lender will also add in various fees, penalties and repossession costs. Skip to main content. Case Studies You can surrender the car but not the debt. Lesson This complaint is an excellent example of a finance company and a borrower working together to find a way through a difficult situation.

Free text. Year Date. How to make a complaint Find out about the complaint process and how we can help you reach a solution with your provider. Search for your financial service provider Search our directory of providers who are a member of our scheme. Join our scheme Discover the benefits of becoming a member organisation of our scheme.

Contact Freephone Phone 04 Email info fscl. News Events Privacy policy Contact Member login. However, a voluntary surrender is noted on your reports. A lender that looks closely will see that you took a proactive approach to resolving the account. After a voluntary surrender, work on restoring your credit. The effect of this negative mark will eventually fade, and you can help offset it by piling up positives, such as paying all bills on time.

If you have to pay a deficiency balance, know the best ways to handle your debt and what to do if it ends up in collections. How voluntary repossession works. Sign up to link and track everything from cards to mortgages in one place. Get started. When voluntary repossession makes sense.