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Retaining Automobile

This may sound like a stupid question but I am going to post it anyway. Here is the scenario.
At the onset of Bankruptcy my wife was employed and I was a student travelling away from home 3 days a week to further my education. I was also registered as a supply teacher.

My wife had a car which was leased through a failing business and we continued to pay the lease.

My car was acquired through a loan and I continued to make the payments also.

On January 24th we get our certificate of discharge.In the mean time we discover that the bank didnt secure their loan with my car.Therefore they are legally required to send me back all payments that we made over the past nine months. Now the car is only worth about $6000 so we feel they should allow us to keep it.
Now the trustee is saying that ” since I was a student” at the time of bankruptcy they should not have allowed us to keep the car.We did everything in good faith and now they are saying ” oh you can keep the car just give us the money that the bank is sending back to you plus a little extra” I feel they are trying to jam us.Can you clarify this??

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One Response to “Retaining Automobile”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

This is a difficult scenario to comment on with such limited information however, there are a few things that stick out:
1. In terms of not advising you this may happen originally, the trustee can only go based on information you provided, and if you provided incorrect information on the vehicle the terms of the engagement can be expected to change (regardless of whether things were done in good faith or not).
2. As a bankrupt individual you are entitled to the exemptions outlined by your province. From the information provided I could see the trustee requiring you to pay monies in for any non-exempt equity in the vehicle (i.e. value of vehicle less the exemption limit allowed in your particular province), but it sounds unusual for them to be requesting payment for the full value of the vehicle (unless you originally claimed any equity in the leased vehicle exempt as each individual is only entitled to 1 vehicle).

If you have any concerns, or you simply want to confirm this is the right way to handle the situation, you would be best to contact the Superintendent of Bankruptcy office in your area.