Our situation…
We are considering bankruptcy, we owe a great deal of money to our creditors.
We now live in our motorhome full time. We owe more on the motorhome than it is worth (they depreciate very quickly)…
If we are forced to go bankrupt on all of our credit cards and lines of credit, but agree to continue making payments on our motorhome (our only home), can they force us to sell it?
We also have a small scooter for getting around on (when the weather permits), is is worth about $2500 and is fully paid. Will we have to give up our only mode of transportation?
We look forward to your reply.
Technically any secured creditor has the right to demand the return of their property, this would include the motorhome. The way security contracts are written is that the filing of a bankruptcy is considered an “act of default†and gives the secured lender the ability to terminate the contract and seize the vehicle should they choose. This does not mean they are going to force the return of the motorhome, it simply means that you will have to contact the lender and see if they will be willing to allow you to continue making the payments and keep the property in question.
As for the scooter, while the actual exemptions vary according to province, most provinces consider scooters and motorcycles to be recreational items and any value in them is to be made available to your creditors. Again this doesn’t mean the trustee will take your property, that is simply one potential course of action. You can also make arrangements with your trustee to purchase the equity in the scooter out of the estate (i.e. if the appraised value is $2500 you may propose to make 10 payments of $250 to the trustee and in turn would be able to keep the property).
While some of these issues can complicate things, it would be important for you to review this information with a licensed trustee to verify how these situations will be treated in your jurisdiction.