Yes, you're right about the debt still existing in the eyes of God. That's why I added the moral obligation part to pay or settle if we are able.
That's because God (being from eternity) doesn't recognize limitation periods though I believe He will recognize ours if we are doing the best we can.

Nevertheless, seeing as how this is a financial affairs website, I just stuck to legalities.

Speaking of legalities, as pointed out before, Consumer Protection maintains that they don't want hard inquiries on debts which are older than 7 years because they violate the various provincial consumer reporting Acts for negative information being carried about a debt.

Provincial reporting acts make no differentiation between hard and soft inquiries - that's a convenient semantic distinction dreamed up by creditors to be used for credit application analysis and payment enforcement activities. Credit bureaus know who pays their bills and say little. So does Brian Pitkin apparently - unless enough consumers complain.

Hard inquiries from collection agencies won't reduce your FICO

score much - and if so, only for the first year - but they sure won't look good to future potential creditors. It's possible to have an 800 FICO score, but if the bank sees 14 hard inquiries on there from Global Credit/ Natale Law Offices and Pomer & Boccia, well......it just won't look very good.

Just to add a further comment to DanielBl's thread.

Based on the information that you have provided, we believe that this deficiency ( debt ) is statute-barred. If, in fact that this is the case, then the creditor ( bank ) is prevented from initiating an action against you in either Small Claims Court or the Superior Court of Justice, depending on the amount claimed ( $25,000 or less for Small Claims Court otherwise Superior Court of Justice ). If the creditor pursues this claim, then your defense would be that the claim is statute-barred under the Limitations Act, 2002.

This does not mean that the debt is extinguished. It still exists. What this does mean is that the creditor is barred from taking legal action in order to obtain a court order. Once a court order is obtained, the creditor can then apply to the court to have the order enforced such as garnishment of wages, seizure of bank accounts and applying a writ of seizure and sale to assets of the debtor. The creditor is then left with "intimidation techniques" to convince the debtor to fulfill his/her legal obligation. This is usually done by phone calls and occasionally by letter. Many times, if a creditor is not making any progress in the collection of a debt, they will negotiate a partial payment in full settlement of the debt. Sometimes, a ruthless creditor can become downright nasty by doing monthly "Hard Inquiries" on the debtor's credit file. What this does is it drives down the debtor's Credit Score to the point where the debtor's score is so low that obtaining credit is very difficult or next to impossible or if credit is obtained, at a very high APR. These types of inquires are "Soft Inquiries" which have no bearing on your credit score. But the Credit Bureaus being the vultures that they are "look the other way" and make no attempt to correct these incorrect inquiries even after repeated requests to do so. Their main source of revenue is from their customers who "pay the freight", that is those commercial customers who continually request credit reports. You and I are simply a nuisance to be dealt with as expeditially as possible. Always bear this mind when you are dealing with a credit bureau.

Sorry, I guess my reply wasn't very clear, especially the part about the Ontario Limitations Act.and its interaction with the PPSA.

When the bank gave you the lien discharge notice after selling the car in 2007, it meant they could still sue (in Ontario, at least) for any shortfall. That's because, unlike many other provinces and states, we don't have a "sue or seize" clause in our PPSA (Personal Property Security Act), as per Section 64(3). I assume the car was bought in Ontario AND you hadn't completed 2/3 payments on it so they could legally repossess it.

Whatever deficiency remained after the repo, the balance became an unsecured debt after the bank sent you the discharge letter. The Ontario Limitations Act excludes any limitation period with respect to the right of a creditor trying to repossess collateral. But the remainder became an unsecured business loan which should be governed by that Act.

As Footloose pointed out, then they only have 2 years to file a lawsuit for the balance. If they really expect $44K, then they'd have to go through Superior Court since the Ontario Small Claims Court limit is $25K. But unless you've provided the bank or its collection agents with some form of signed written acknowledgement since 2007, the debt will be stats barred.

So it's likely they're bluffing you. The banks have their collection agents do that every day. However, a couple of points to keep in mind: It's strange that it's only after 3 years they're starting to pursue the (probably grossly inflated) balance. Why wouldn't they have done so back in 2007? Perhaps they did a PPSA search on your name and noticed you are a better litigation prospect now than back then.

Or maybe, unwittingly, you've given them some form of written acknowledgement during the last 2 years, and they're trying to lure you into restarting the limitation period again. I'm only guessing as I don't know the minutiae of the case.

Anyhow, I would keep all future correspondence with the bank and its agents to the telephone if I were you. Tell them if they want to sue, go ahead and do so. If they really expected $44K, they would leave out the head games, and instead, directly litigate. If you feel morally obligated and are able to make them an offer, do so, but only over the phone. Anything written should come only from them and contain an authorized signature.

You might want to give Mark Silverthorn a quick call.

Thank you both for your replies. My apologies for not understanding this very well.
Does this still mean that I am responsible to pay the deficiency (this is what I was told by the bank rep)? If so, then I must pay the balance as stated by the bank.
FYI: Collections continues to call me to pay and they tell me that the bank has informed them to sue me for the money.

What can I do?

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90p10_e.htm

In particular, Section 64(3) of the Ontario PPSA makes the debtor responsible for any shortfall if the creditor fails to fully recoup the debt on disposal of the associated collateral.

DEFICIENCY

Section 64(3): Unless otherwise agreed in the security agreement, or unless otherwise provided under this or any other Act, the debtor is liable for any deficiency. R.S.O. 1990, c. P.10, s. 64 (3).

Ontario does NOT have a "Seize of [or] Sue" clause in its Personal Property Registry Act, unlike some provinces such as BC. Therefore, in Ontario, the bank might choose to sue for any shortfall after seizing the vehicle or other item.

Also note that Section 65(5) and some adjacent subsections deal with the time frames that a creditor has to act within or they lose their right to persue deficiencies. Conversely, other conditions for debtor recovery rights apply to personal property to which the debtor has completed at least 60% payment towards.

Section 65(5) FORECLOSURE

(6) If no effective objection is made, the secured party shall be deemed to have irrevocably elected to accept the collateral in full satisfaction of the obligation secured at the earlier of,

(a) the expiration of the 15-day period mentioned in subsection (3) or, if the period was extended under subsection (3.1), the expiration of the extended period; and

(b) the time when the secured party received from each person entitled to notification under subsection (2) written consent to having the secured party retain the collateral in satisfaction of the obligation. 2000, c. 26, Sched. B, s. 16 (12); 2006, c. 34, Sched. E, s. 21 (3).

The Ontario Limitations Act of 2002, was primarily designed to deal with unsecured business debts as well as a wide spectrum of personal torts; however, it excludes secured real property and personal property (vehicles, boats, jewelry, electronics etc) contracts.

Now, let me get this straight. You owned a car which in 2007 was repossessed and subsequently sold in order to satisfy an outstanding loan against the car and the net proceeds were less than the monies owing on the car thereby creating a deficiency for which the bank is seeking redress from you. On top of that you received 2 collection agency notices, one of which demanded a payment of $44,000 and change. What the hell did the bank repo, a Lamborghini?

The Ontario Limitations Act, 2002 covers both secured and unsecured debts. There is no reference anywhere in the Act to a deficiency created upon the sale of an asset to which the creditor is seeking relief. In fact, the word "deficiency" is not defined within Section 1 of the Act, which is the definition section of the Act. Sections 4 and 5 deal with the basic limitation period of 2 years. Section 2 of the Act deals with claims pursued in court proceedings to which the Limitations Act, 2002 has no application. Section 16 of the Act deals with matters in which there is no limitation period.

The two-year basic limitation period ( the time during which an action may be commenced in Ontario ) is two years from the earlier of the day on which the essential elements ( act or omission by a known person resulting in damages to the claimant ) of the claim are known to the claimant and the day on which they are discoverable. There is a rebuttable presumption that a claimant discovered all the essential elements of the claim on the day on which the act or omission giving rise to the subject loss or damage occurred. The foregoing represents a codification ( meaning taking unwritten laws that are generally observed and practiced and writing them into an Act or Statute ) of the existing common law rules..

A claim is discoverable on the earlier of the day on which:

1. The person with the claim first knew each of the following:
( a ) that the injury, loss or damage had occurred,
( b ) that the injury, loss or damage was caused by an act or

omission by the person against whom the claim is made,
( c ) that a proceeding would be an appropriate means to seek a

remedy.

NOTE Unless the claimant can prove otherwise, the claimant is

presumed to know all of the foregoing on the day on which the
act or omission took place.

2. A reasonable person with the abilities of the claimant and in the
circumstances of the claimant first ought to have known each

of the elements of the claim set out above.

What does all this mean? It is presumed that if the car was repossessed

in 2007 it was also sold ( either privately or at public auction ) in 2007. The bank would know how much was owing on the car and once the sale proceeds had been established could immediately determine the deficiency. The bank should have contacted you immediately or soon thereafter once the deficiency was known to demand payment or make reasonable arrangements for the payment of the deficiency.

Unless there are more details that have not been provided in your thread, this deficiency ( debt ) is statute-barred under the two-year basic limitation rule. If the collection agencies contact you again, tell them that under the Collection Agencies Act, R.R.O.1990, Regulation 74 Section 22 that you dispute the debt and request the collection agency take the matter to court.

Section 22 of Regulation 74 reads as follows:

( 1 ) If a debtor sends a collection agency or collector by registered mail
a letter stating that the debtor disputes the debt and suggests that
the matter be taken to court, the collection agency or collector shall
not thereafter contact or attempt to contact the debtor unless the

debtor consents or requests the contact.

I would also suggest that you contact your bank and request the manager or the bank's legal department to give you written "Chapter and Verse" meaning what Sections, Subsections, Paragraphs, etc. of the Limitations Act, 2002 the bank is relying on that exempts "deficiencies" under the Limitations Act, 2002.

If in the unlikely event that you are served with court papers, please post the details on this website. I will be happy to assist you from that point forward.

Good Luck and have a GREAT DAY

I had to return a car after during a difficult time in my life. The bank took back the car in 2007 then just recently in at the beginning of this year (2010) I received collection notices for it. I received 2 from different companies (but I think they work together) for different amounts. First was for $4.00 and change. The other at $44,000 and change. I was puzzled as I received a discharge letter in 2007 - the lien was removed from my home to them to resell the car. Also, I never received anymore communication about the car until this year from collections (ie., I was never informed of when it would be sold, amount, etc.). I was informed by the bank that they did not recover all the money to pay for the balance owed - so now I owe the deficieny on it. My question is does the SOL in Ontario cover me from having to pay for it? I was informed by the bank the I still must pay as the SOL does not apply on deficiency. Also, the collection agency informed me that they will sue and garnish my wages if I do not pay.
Please let me know what I am legally responsible for and what I can do?
Any help is appreciated.
Thx.