Can I Buy a Car During Bankruptcy?
Bankruptcy a buying a car – My husband and I are looking into filing for bankruptcy. We currently have no assets other than our car, but there is a loan attached and the payments are quite expensive and would probably need to be included in the bankruptcy. Is there a way where we would be allowed to somehow save to buy a 2nd hand vehicle cash.
Posted from: New Brunswick
When you file an assignment in bankruptcy you sign over to the trustee for the general benefit of the creditors everything you own, have a right to or an interest in for the general benefit of your unsecured creditors. This does not include those assets that are exempt under Federal or Provincial legislation. Exemptions in motor vehicles vary from province to province in New Brunswick a motor vehicle can be claimed exempt to a maximum of $6,500.00 if that vehicle is required for your employment, to retain employment, for your trade, profession or occupation or for transportation to a place of employment where public transportation is not reasonably available. Most often there is insufficient in a motor vehicle where it is held as security for a loan. If this is true in your case the secured creditor would be entitled to seize the asset and any shortfall would be caught up in the bankruptcy.
Your ability to save to pay a second hand vehicle would not be impaired by the bankruptcy process but may be restricted by your budget. Directive 11R of the Bankruptcy and Insolvency Act dictates the level of payments that you would make to your trustee in bankruptcy. The balance of your income subject to good budgeting practices may allow you to set aside money each month to purchase a vehicle.