Well, the point is that it's become unimportant whether the bank takes it or not. It's already past the point where the creditor can realize any money by repossessing it after they pay the bailiff costs for acquisition, storage and selling. That's obviously why they're not interested. But should they decide to repossess it at some point later, you might be legally stuck with some significant bailiff fees which would be tacked onto the shortfall part of the loan. If you voluntarily relinquish title, then the bank can't come after you for this.

But given the value of the item, it's highly unlikely the bank will bother any further with the machine. The most important thing is to force a determination of the shortfall of the loan making sure its starting date hasn't been shoved forward. Banks are definitely not above that. They only have 2 years to launch legal action from when the loan went into default. So make sure you retain all the correspondence on the account.

Having said that, I don't think they'll sue given the probable amount involved and your poor financial situation, but you'll never be fully safe until the 2 years are up.

Thanks for all the information, I appreciate your help. I'll send a registered letter to the bank. I have a question though, I am still not sure where to abdanon the scooter or where to turn it in as the bank does not want it. Or should i write the letter and send it to the bank and wait for their responce?

Well, you could always scoot over to the bank and leave it there, but the motor vehicle would still be registered to you and you'd just be left with a load of parking tickets and/or towing and storage fees.

Often, both sides effectively abandon the item once its age/depreciation make it less valuable than the amount owing. So it's really a moot point who has possession of it as the interest keeps building up no matter what's done with the bike. The bank can sue for any shortfall, as pointed out, because Ontario doesn't have a "seize or sue" clause in our Provincial Property Registry. (That's where the bank is registered as a lienholder against the bike's title.)

In this case, the anticipated shortfall is constantly increasing while the value of the collateral is constantly decreasing. The fact the bank doesn't want it means its market value won't even cover the fees a bailiff will charge to seize and sell it at an auction. That's not a bad thing for you because, while there is no limitation period for the creditor to seize the collateral; there is a 2 year limitation period to recover the shortfall because it becomes unsecured debt.

That period would start from when you defaulted on the loan, not from when they pick up the bike - in fact, they may never bother to repossess it. Certainly, if it's under $5K or $10K, I think most institutions will treat it effectively as an unsecured loan, and simply give it to a collection agency, who in turn, likely will be given instructions NOT to start legal action, especially given your meagre circumstances. Be prepared at least for a lot of phony threats though. It's a little more complex in reality because usually the asset has to be repossessed for the shortfall to be quantifiable.

Nevertheless, if you send the bank a registered letter with some sort of appraisal certificate of the bike, you might well be protecting yourself. The thing is, in principle, the bank could seize it at any time down the road, say in 3 years, when (with interest), the loan balance has mushroomed into a huge amount. Even if they get $100 (net) for the bike, and the loan stands at $10,000.00, they could claim a shortfall of $9900.00 and say the limitation period begins then. Not that that would happen, but who knows. A registered letter lets them know you are voluntarily abandoning the property into their hands and as such you will not be legally responsible for any future (inflated) bailiff recovery, storage and sales fees
and will be unable to make any further payments on the account.

Happy motoring!

Bought a scooter 1 year ago and financed it (secure loan) and can no longer make the payments. I have fallen into default and been sent to the collection agency. I have a lien on the title in Ontario. I decided to try to return it to the bank (National) and call them to make arragnements. They don't want it and told me they don't take reposessions. Now I'm stuck, I don't know what to do with the scooter, I owe a lot more than it is worth and can't sell it with a lien and the bank does not want it. I called the collection agency and all they want is the $$. Has anyone been in this situation or can provide me any advice. I only have stroage for it for the next month then I don't know what to do.

Thanks.