Question: What will happen to my new car if I go bankrupt in Ottawa? Will I lose my car?
What will happen to my new car if I go the proposal way. Will I lose my car?
Answer: The answer depends on the value of the car, and the amount owing on it. If you go bankrupt in Ottawa, or anywhere in Ontario, you are allowed to keep one motor vehicle with no loans against it worth up to $5,650. If the vehicle is worth more than that amount, you can pay the excess amount to the trustee for the benefit of your creditors, so you could keep a $6,650 car by paying the trustee $1,000.
If there is a loan against the car equal to the value of the car, the trustee will not take your car. It will be up to the lender to decide whether or not they will allow you to keep making payments on the car, so you can keep the car.
If you file a consumer proposal, you can keep your car with no loans against it. If there is a loan, as with a bankruptcy it is up to the lender to decide whether or not they will allow you to keep making payments on the vehicle.
This is a complicated area of bankruptcy law, so we suggest you contact an Ottawa bankruptcy trustee for more information.
