Question: i have lots of debts on credit cards plus i have a car which is financed with the bank the original loan was 38000$ now is 30000$ i can’t handle my minimum payments for my credit card and the car and my bill anymore and i want to go bankrutcy but i don’t know what’s gonna happen with the car.
Answer: If you file bankruptcy in Ontario, and if you have a car loan, you have two choices. First, if the value of the car is the same or less than the value of the loan, you can contact the lender and ask them if they will allow you to keep the car, and keep making payments on it.
Most lenders will allow you to keep your car, but there are three big banks that automatically repossess your car if you file bankruptcy. Your Ontario bankruptcy trustee can give you more information.
If you cannot afford the car payments, you other option is to simply return the car to the lender. They will sell the car and apply the proceeds to the loan. If there is still a balance remaining, that shortfall will be included in your bankruptcy.
More information can be found in this article on What Happens to My Car if I File Bankruptcy in Ontario?
Tags: car