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Can I sell my car during my bankruptcy period?

I recently filed for bankruptcy and was allowed to keep my car as it qualified for the exemption …. value of less than $5000. If I sell my car prior to discharge do I have to turn that money into my trustee …or can it be used as a deposit towards the future purchase of another vehicle?

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One Response to “Can I sell my car during my bankruptcy period?”

A licensed trustee said...

If you reside in Ontario then yes, you may keep the money and use it as a downpayment towards another vehicle. If you reside elsewhere then you should check with a local trustee to determine the laws in your province or territory.

Keep in mind that it may be difficult to obtain reasonable financing for the “new to you” car that you want to buy. Make sure whomever is going to finance the deal knows about your bankruptcy before you sell the old car or you may have to go out an buy a beater…