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*Unsecured debt includes credit cards, lines of credit, bank overdrafts, payday loans, and unsecured personal loans (excluding student loans). It does not include mortgages and car loans.

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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Super Intendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Secured Car Loan

Hello. I have a secured car loan with RBC for $10,000, with $6,000 owing. I realize in most cases that a bankruptcy will not affect a secured loan since the bank already has a lien registered. I also have $20,000 line of credit owing to the same bank,. My question is if it`s possible for the bank to reposses my car, even though i have every intentions to continue with my car payments? Also, do I have the right to pay off secured creditors in full with no obligatoions to my unsecured creditors, if i go bankrupt? Sorry for the loaded question, but thank you in advance for your advice! thanks

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One Response to “Secured Car Loan”

Barton Goth GCO Bankruptcy Trustees said...

Yes it is always possible for teh bank to repossess your car, as it is written into the loan agreement that you signed that upon an “act of default” the bank retains this right and a bankrutpcy is seen as an act of default.

Now in practice most institutions actually prefer for you to keep the vehicle, but techincally it is up to them.

As for your ability to pay secured creditors in full during a bankruptcy without being required to pay any of your unsecured debt, you are correct.