One of the great downsides to personal bankruptcy in Ontario, particularly in those areas where public transit is infrequent, has always been the loss of a car in the bankruptcy.
Prior to April 15, 2001, in most cases, if a bankrupt owned their car outright, their automobile became an asset of the Estate, and the trustee would either seize the car, or require payment by the bankrupt to pay the Estate for the fair market value of the vehicle (see our article on cars in a bankruptcy).
However, the law changed on April 15, 2001, and the law changed again on December 14, 2005, and a bankrupt may now keep one motor vehicle worth up to $5,650. If you own a car worth $2,000, and the car has no liens or loans registered against it, you can keep your car in bankruptcy - the trustee will not seize it.
On June 22, 2006 the law in Ontario changed again. If your car or other motor vehicle is worth more than $5,650, and has no liens against it, you can keep it in a bankruptcy by paying the trustee the value of the car over $5,650. Thus if you have a car worth $7,650 with no liens, you can keep the car by paying the trustee $2,000.
As these rules keep changing, to determine if you can keep your car a bankruptcy, call one of our bankruptcy offices in Ontario or contact a bankruptcy trustee by email today.