If you own a condo and car will they be taken away if you declare bankruptcy? What if there is garnishing on your wages, can this be stopped as well? Do I need an appointment to talk with someone there and what hours is there someone available?

2010-10-05   minute read

Bradley Milne


If the vehicle and condo are encumbered by secured creditors, you may be able to continue making your regular monthly payments on those assets and retain them. You are also entitled to a $3,000 equity exemption for a vehicle (provided you are working) and either a $2,500 (sole owner) or $1,500 (joint ownership) equity exemption on your home. If, for example, you own a car free and clear and it's worth $5000, the amount of equity for the bankruptcy estates is only $2000 assuming you qualify for the equity exemption. The Trustee could sell the car, pay out your exemption and retain the remaining funds for the bankruptcy estate. Alternatively, a more common way to deal with this situation would be for you to make a monthly payment to the bankruptcy estate to buy back your equity in the vehicle. If you own the car free and clear, it's worth less than $3,000 and you qualify for the exemption, then there is no equity and so you would be able to keep the car. In summary, there are a few variables to consider in determining whether or not you are able to retain a particular asset i.e. the value of the asset, whether or not you qualify for an exemption, the extent to which the aaset is secured. Upon filing for bankruptcy, there is a stay of proceedings that comes into effect such that creditors cannot continue or commence collection efforts. As such bankruptcy stops garnishments. In a few rare cases a garnishment may not be stopped or perhaps only temporarily (e.g. child support). You must meet in person with a licensed bankruptcy trustee for an assessment of your financial situation. If you reside in a remote location, this may be completed by telephone. I trust that most offices are open from 8 to 5 Monday to Friday with some availability after regular business hours.

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