Instalment SaleDifficulties Making Payment

When you enter into an instalment sale contract, you have to make the payments as provided for in the contract, among other obligations.

Are you late with your payments ? Unless you come to an agreement with the merchant, he or she can choose from the 3 following options.

Demand the late payments

The merchant may demand that you immediately pay all of the instalments that are late.

Repossess the item

The merchant may send you a written notice demanding you make all late payments, failure of which the merchant will repossess the item after 30 days. This notice is called a Notice of Repossession (29.8 KB).

Within 30 days of receiving the notice, you can:

• make the late payments; or
• return the item to the merchant.

The merchant may not repossess the item before that deadline.

Demand all scheduled payments

The merchant may send you a notice along with a statement of account. In this notice, the merchant demands that you pay all the late instalments within 30 days, otherwise he or she will demand payment of all instalments provided for in the contract (both late instalments and those to come). This notice is called a “Notice of Forfeiture of Benefit of the Term.”

In order to have the right to send you such a notice, the merchant must have included a clause to that effect in your contract.

If you receive a Notice of Forfeiture of Benefit of the Term, you may, within the 30-day deadline:

• make the late payments;
• petition the court to obtain permission to return the item or have the terms of the contract changed.

All of these situations can have financial consequences and tarnish your credit file. If you need more information, you can contact the Office de la protection du consommateur.

Selling the item

You may not sell an item you have purchased by instalments before having paid it off in full, unless you have received authorization to do so from the merchant.