Question: Am I able to keep my new vehicle which I recently purchased ( financed thru the Car dealership ) if I declare Bankruptcy, since I need it to get to work and to pick up and drop off my daughter to her daycare centre?
Answer: Bankruptcy rules do not allow you to keep a vehicle simply because you require it to get to work, or to transport your children.
However, if the vehicle is financed through a car company, the vehicle probably has no “equity”, meaning the vehicle is worth about the same as the amount owing on the car. In that case your bankruptcy trustee will not seize your vehicle if you go bankrupt. However, you should confirm in advance with the lender that they will allow you to keep the vehicle, provided you continue to make the monthly loan payments. Car finance companies generally don’t have a problem with bankruptcy, but some banks do, so you should also discuss this with your trustee.
If there is no loan against your car, you are allowed to keep a car worth up to $5,650 in Ontario if you go bankrupt. An Ontario bankruptcy trustee can provide you with further information.
Tags: car