If I Live In Saskatchewan, Can I Keep My Car In A Bankruptcy?

As Trustees and Proposal Administrators in Saskatchewan, one of the most frequently asked questions we hear is "can I keep my car?" In most of the situations we come across, the answer is – yes.

The first step toward finding out whether you will be able to keep your vehicle is to assess its value. Either we can search the value of your vehicle in the "Black Book” or you will need to have your vehicle appraised and pass that information on to your Trustee. Your Trustee will only be able to accept the valuation of someone who is qualified to sell or value cars. This person will write a letter stating what they believe is your vehicle’s the current market value.

If you owe money for your vehicle (and what you owe is more than the vehicle is worth), you will be able to keep the vehicle as long as you can continue to make regular payments, in addition to your required payments for your bankruptcy. Equity in a vehicle up to $10,000 is exempt in Saskatchewan. This means, for example, if you own a fully paid for car valued at $8,000, you would be able to keep your vehicle after filing for a bankruptcy or a Consumer Proposal. By the same token, if you own a car valued at $16,000 with a total of $9,000 left owing, you would be able to keep it, although you would have to continue making the required payments to the secured creditor in the vehicle (the bank, finance company, etc.).

If you owned a vehicle valued at approximately $13,000 with no financing on it, you would be expected to pay a $3,000 Non-Exempt amount to the Trustee. This might feel daunting, but your Trustee can help you make payment arrangements that are reasonable for your situation.

It is important to note however, that these rules apply to one motor vehicle only. If you happen to have a second vehicle in your name that’s owned outright, the exempt limit does not apply in any way to the second vehicle and you would have to either surrender the vehicle or pay the Trustee the full value of the vehicle.

In short, you almost certainly will be able to keep your vehicle. However, one thing to consider is the financial responsibility of holding onto your vehicle. Giving up your vehicle may reduce monthly expenses by releasing you from having to make lease and insurance payments, while also managing the costs of gas, maintenance and repairs.

If you do not wish to retain a vehicle that is financed for more than you owe, you can also return the vehicle to the secured creditor and any shortfall would be included in your bankruptcy or Consumer Proposal.