Can I keep my car during a consumer proposal?

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In Canada, you can usually keep your car during a consumer proposal if you’re not behind on payments and the car’s equity is within provincial limits. Provinces set specific rules for vehicle equity. If your car is essential for work or family, it strengthens your case, but keep payments current to avoid repossession.

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Question

Can I keep my car in a consumer proposal? I’m worried about what happens to my car if I decide to go through with a consumer proposal. It’s pretty crucial for getting around, so I’d love some clarity on whether I can hold onto it.

From: Anonymous Question, Ontario (ON)

Debt Insiders Answer

Sure thing! In Canada, keeping your car while undergoing a consumer proposal is usually doable, as long as you’re not seriously behind on payments and the car’s equity doesn’t surpass your province’s limit. Each province sets its own rules on how much equity you’re allowed to keep in a vehicle when you’re in this situation. If your car is essential for daily life, like getting to work or managing family duties, that definitely bolsters your case for holding onto it. But, if you’re paying off the car, remember, you’ll need to keep up with those payments to avoid losing it to the lender.

From: Anonymous Question

Office of the Superintendent of Bankrupty (OSB) Answer

Yes, you can keep your car in a consumer proposal, provided certain conditions are met. According to the Bankruptcy and Insolvency Act, your vehicle is considered an exempt asset if its value does not exceed the provincial exemption limit. Generally, in most Canadian provinces, this limit allows you to retain a modestly valued vehicle necessary for your daily transportation needs.

Refer to the assets and exemptions sections in the Bankruptcy and Insolvency Act and provincial regulations, such as section 67 of the Act, which details exempt property in insolvency proceedings. Additionally, you should ensure that you can maintain the payments for any outstanding financing on the vehicle in order to keep it.

From: This answer is provided by scanning the OSB Bankruptcy & Insolvency Act and related directives

Related Questions

Here are the top 5 most frequently asked questions related to keeping a car in a consumer proposal, based on common concerns and search trends:

1. Can I keep my car in a consumer proposal?

• Yes, you can keep your car in a consumer proposal, as long as you continue to make your car loan payments.

2. Do I need to include my car loan in a consumer proposal?

• No, you do not need to include your car loan in a consumer proposal if it is a secured debt, but you must continue making the loan payments.

3. Will my car be repossessed if I file a consumer proposal?

• No, your car will not be repossessed if you continue to make the payments on your car loan, as it is a secured debt and not included in the proposal.

4. Can I get a new car loan while in a consumer proposal?

• Yes, you can get a new car loan while in a consumer proposal, but it may involve stricter guidelines and higher interest rates.

5. How does a consumer proposal affect my ability to finance a car in the future?

• A consumer proposal can impact your credit score, but it does not necessarily prevent you from financing a car in the future, although terms may be less favorable.

References

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