37 (1) [Repealed, SOR/2022-157, s. 20]
(2) If a borrower is in default under section 36, the lender must demand repayment of the outstanding amount of the loan within the period specified in the demand before submitting a claim for loss sustained as a result of a loan under section 38.
(3) If the outstanding amount of the loan is not repaid within the period specified, the lender must take any of the following measures that will minimize the loss sustained by it in respect of the loan or that will maximize the amount recovered:
(a) collect the principal and interest outstanding on the loan;
(b) fully realize any security, guarantee or suretyship;
(c) realize on any insurance policy under which the lender is the beneficiary;
(d) fully implement a compromise settlement with the borrower or with a guarantor or surety or any other person on behalf of the borrower, guarantor or surety; and
(e) subject to subsection (4), take legal proceedings, including the enforcement of any resulting judgment, if the estimated cost of the proceedings is not greater than the estimated amount that may be recovered.
(4) If the borrower is a partnership or a sole proprietor, the lender may not execute a judgment by realizing on the assets (other than the assets of the small business in respect of which the loan is made) of the partners or sole proprietor, in an amount greater than the sum of
(a) in the case of a loan made before April 1, 2014, 25% of the original amount of the loan and in the case of a loan made after March 31, 2014, the original amount of the loan,
(b) interest on the judgment,
(c) taxed costs for, or incidental to, the legal proceedings against the borrower, and
(d) legal fees and disbursements — other than costs referred to in paragraph (c) — and other costs incurred by the lender for services rendered to it by persons other than its employees for the purpose of the legal proceedings against the borrower.
- SOR/2009-102, s. 21
- SOR/2014-7, s. 23
- SOR/2022-157, s. 20
- Date modified: