What happens to my car if I file for bankruptcy in Ontario?

What happens to my car if I go bankrupt?

In many places in Ontario, a car or truck is essential; without a car, you can't get to work. So what happens if you go bankrupt?

The rule in Ontario is that you are allowed to keep you car if you go bankrupt, provided your car or truck is worth less than $5,650, and there are no loans or liens registered against it. If your motor vehicle is worth more, you would be required to pay to the trustee the amount over that limit. For example, if your truck is worth $7,650, you would need to pay $2,000 into your bankruptcy estate to keep your truck.

If there is a loan or lien registered against your vehicle, and if the loan is for as much as the vehicle is worth, the trustee won't take your vehicle. It is up to the lender to decide whether or not you can keep your vehicle (and keep paying the loan on the vehicle).

Some lenders don't care if you are bankrupt or not; if you are making your payments, they allow you to keep your vehicle. Others will take your vehicle when you go bankrupt, even if your payments are up to date.

Which lenders do that? The list changes regularly as bank's collection policies change, so we recommend that you contact Ontario bankruptcy trustee for more information, and to arrange a free initial consultation.