Proceeds from exempted vehicle while in bankruptcy
when I filed for bankruptcy recently i was allowed to keep my vehicle, which was free of any lien, as it was worth less than the $5650. If I were to sell this vehicle prior to my discharge, what happens to the proceeds? Can I use it as a down payment on another vehicle … (which I have the opportunity to purchase from a family member)? The actual purchase of this vehicle would not take place until after my discharge when i can apply for a loan with a financial institution. For now, the car would remain registered to the other family member and the current car loan would remain in their name.
registered to the other family member and the current car loan would remain in their name.
If you were to sell the vehicle prior to discharge the proceeds are yours to keep and use as you wish as long as they are less than the amount of the exemption that is permitted in your province.
If you choose to explore a new vehicle and need financing, you are legally required to disclose the fact that you are in bankruptcy and this will likely make it harder to obtain financing, but it is possible. However, you can expect to have to pay a higher interest rate than is available to others.