What To Do With My Vehicle In A Bankruptcy

2010-06-21   minute read

Each province has a list of assets that you get to keep when and if you file for bankruptcy. This list is called "exemptions." In Alberta, that includes $5000 equity in a primary vehicle. However, your exemptions are subject to any loan agreements/liens that you have against them. So in your case, your right to keep your car is subject to the bank loan.   If you are behind on your payments, the Bank has the right to seize the vehicle, even in a bankruptcy. (If you were current on your payments, new Bankruptcy legislation states that the bank couldn't take the car). Having said that, the Bank is not going to recover the $19,000 that you owe against it.  It they take it back and sell it, they will only get the $7,900, less any selling costs.  A lot of the banks will atleast look at working with you to pay them for the fair market value of the car.  That's going to depend on which bank it is, the reasons you fell behind, what your budget looks like after your bankruptcy, your past relationship with them, etc. Feel free to contact one of the counsellors in your area to discuss this particular bank and our past experiences with them.  There's no guarantee that the bank will work with you until they see your specific situation, but we can give you our experiences. Our list of offices and contacts can be found on our site athttp://www.mnpdebt.ca/contact/alberta/default.aspx Donna Carson, CGA, CIRP, Trustee Calgary and Central Alberta regions 1.877.500.0792

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