This week we are reviewing the new bankruptcy rules in Canada. Yesterday I gave a detailed overview of the new rule allowing for greater debts to be included in consumer proposals, and as a result a consumer proposal may be a good solution to debt problems.
Today’s tip is more good news from the new rules: You may be able to keep your car if you go bankrupt.
Each province in Canada has a different exemption limit for motor vehicles, assuming you have no loans or liens registered against your vehicle. However, under the old rules, if you had a loan against your vehicle, the lender could reposses your vehicle if you filed bankruptcy in Canada, even if your payments were up to date!
Under the new rules, if your payments are up to date, you can choose to keep your vehicle, and keep making payments to the secured lender. You can also choose to stop making the payments and return the vehicle. You have the choice.
This choice “puts you in the driver’s seat”. You can now decide what makes sense for you.
This is a good rule; tomorrow we will examine a rule that is not as good for people in financial trouble.
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