Car Exemption And Bankruptcy

2010-05-04

Hello, In Manitoba you are entitled to an equity exemption of up to $3,000 for a vehicle provided you are working.  The exemption cannot be split between two vehicles if, for example, you had two cars worth $1,000 each.  Normally you would claim your exemption on the vehicle with the most equity or the vehicle you wish to keep the most. In your case, you would likely claim an exemption on the vehicle that is running.  It is also likely that you would still be able to keep the other vehicle.  If it is an older model vehicle that is not running it may not have what we call a "realizable value" (i.e. it might cost more to sell than it is worth or it simply doesn't have a value).  Alternatively, if the vehicle has a modest value, you could probably buy back the vehicle from the bankruptcy estate in a monthly payment.  For example if the non-exempt vehicle is worth $750, you may be able to buy it back in 9 monthly payments of $83.33. Brad Milne, CIRP Trustee in Bankruptcy Brandon, Manitoba