Answer: Assuming that your car is worth the same or less than the amount owing on the loan, you could keep your car if you declared bankruptcy, provided you continued to pay the loan.  Alternatively, you could stop paying the loan and return the car when you declare bankruptcy.

You can keep your RRSPs when you go bankrupt, except for the amount that you have contributed in the last year.

An Ontario bankruptcy trustee can provide you with more details in their free initial consultation.

Answer:  If you file for bankruptcy and your intention is to keep the car, you’ll most likely be able to do so as long as your account is up to date and you and the car loan company agree that you’ll continue making the payments to them.  You’d only include the car loan debt into the bankruptcy if you volunatrily wanted to surrender the vehcile back to that creditor and cease paying them.

For more information on how the bankruptcy process works, our advice would be to contact a local trustee in bankruptcy who’d be happy to explain your options to you in more detail.

Answer: If you file bankruptcy in Ontario, you only lose contributions you have made to your RRSP in the last twelve months.  If you have not contributed in the last twelve months, you will not lose your RRSP.

As for your cars, for the car with a loan, you can either continuing paying the loan and keep the car, or give it back to the lender.  You are permitted to keep one car worth $5,650 or less, so you could keep your other car if you filed bankruptcy in Ontario.

Answer: If you file bankruptcy in Ontario, you are required to either surrender your house to the trustee, or pay to the trustee the equity in your house.  Equity is the value of the house (the difference between the value of the house, and the amount owing on the mortgage and other charges).  If there is no equity, you could keep your house (provided you keep the mortgage in good standing).  In your brother’s case, if the house is owned jointly by him, his sister, and his brother, he would only be required to pay his share of the equity (presumably one third).

He should get an appraisal on the house, and confirm the balance owing on the mortgage, and then meet with a trustee to discuss his options.

For the car, if there are no loans against it, you can keep a car worth up to $5,650 if you go bankrupt.  Since his car is old, it is probably not worth more than that amount, although again he can have it appraised to be sure.

More information can be found in this article on what happens to your house if you file bankruptcy in Ontario, and what happens to my car if I file bankruptcy in Ontario.

For a review of his exact situation, he should consult an Ontario bankruptcy trustee for a no charge initial consultation.

Answer: Yes, what you describe is legal. Bankruptcy deals with your unsecured debts (like credit cards); secured debts are not discharged in a bankruptcy, unless you surrender the security. In your case you will be surrendering your first car when you go bankrupt, so it will no longer be a secured debt, and the resulting shortfall will be discharged in your bankruptcy.

Your “new” car will not be surrendered, and because it’s a secured loan you may continue making payments on it and keep the car after you file bankruptcy. If the new vehicle is necessary, and the payments are lower than the first vehicle, your strategy probably is a good one, although you should discuss it in detail with your Ontario bankruptcy trustee to ensure that there are no other factors that should be considered.

Answer: Yes, you can. There are two types of debts: secured and unsecured. Unsecured debts, like credit cards, are included in a bankruptcy. Secured debts, like a car loan, are NOT automatically discharged in a bankruptcy unless you surrender the asset.

So, with your car loan, you have two choices. If your payments are up to date and you want to keep making the payments, you can keep your car and keep making your payments.

Your other choice would be to stop making the payments and surrender the car to the lender, in which case any resulting shortfall would be include in your bankruptcy. A bankruptcy trustee can explain the process in more detail.

Answer: The rule in Ontario is each person who goes bankrupt is permitted to keep one motor vehicle, if there are no liens or loans against it, worth up to $5,650. So, if your wife owns the car and you own the motorcycle, and each are worth less than $5,650, then yes, you could keep both vehicles in a bankruptcy.

However, if you (or your wife) own both vehicles, then only one vehicle is exempt.

Your Ontario bankruptcy trustee can provide more information.

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.

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?