Section 232 — Bankruptcy and Insolvency Act: Secured claims

A registered creditor holding security for a claim may, at any time, elect to rely on his security notwithstanding that the claim is included in a consolidation order. Where the proceeds from the disposal of the security referred to in subsection (1) are in excess of the registered creditor’s claim, the excess shall be paid into court and applied in payment of other judgments against the debtor. Subsection (2) does not apply where the security is in the form of chattels exempt from seizure under any law in force in the province in which the consolidation order was issued. Where the proceeds from the disposal of the security referred to in subsection (1) are less than the registered creditor’s claim, the creditor remains entitled to the balance of his claim. Subsection (4) does not apply in a case where, under the law in force in the province in which the consolidation order was issued, a creditor who enforces his security by repossession or repossession and sale, or who seizes and sells the security under an execution issued pursuant to a judgment obtained against the debtor in respect of the claim so secured, is limited in his recovery of the claim to the security so repossessed or the proceeds of the sale thereof.