I have a vehicle, year 2000 value is about $8500.00, with no debt on it. What would happen to this given the vehicle exemption is $5000.00?

2010-08-23   minute read


The Trustee’s role in a bankruptcy is to realize on non-exempt assets, for the benefit of your creditors. In BC, you may claim up to $5,000 in equity in one motor vehicle (unless you are a maintenance debtor – i.e., you owe spousal or child support – in which case the exemption is only $2,000). If your vehicle is worth $8,500 and you may claim a $5,000 exemption, there is roughly $3,500 in non-exempt equity that must be realized by the Trustee There are two ways for the Trustee to realize on the non-exempt equity: 1) the Trustee takes possession of and sells the vehicle, returning to you the $5,000 that you are entitled to; or 2) you and/or a third party may pay the sum of $3,500 to the Trustee and the Trustee “releases” its interest in the vehicle (this is more common than the first option). Please note that other factors may be taken into consideration in calculating the equity (i.e., realization costs, insurance, etc.). A Trustee can give you further details based on your specific circumstances. Hope this answers your question. Feel free to contact me directly if you would like to discuss this further.

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