Can I keep my car in a consumer proposal?

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If you’re in a consumer proposal, you can typically keep your car as long as you’re making the payments. Car loans and leases are secured debts, meaning you need to stay current to avoid repossession. Unlike bankruptcy, the car’s value doesn’t affect your ability to hold onto it during a proposal. Happy driving! Reach out via phone, text, or live chat if you have any questions.

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Consumer Proposal Question

Can I keep my car in a consumer proposal? I’d like to know if I can keep my car while I’m in a consumer proposal or if I’d lose it.

From: Anonymous Question
Location: Kitchener, Ontario (ON)
Category: consumer proposal

Consumer Proposal Answer

Sure thing! You can generally hang onto your car while you’re navigating a consumer proposal, as long as you’re keeping up with those car payments. It’s crucial because car loans and leases fall under secured debts, meaning if you fall behind, the lender might come knocking for a repossession. Here’s the kicker—unlike going bankrupt, where your car’s value could trip you up, your car’s price tag doesn’t matter when it comes to staying on the road in a consumer proposal. Happy driving!

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, you can keep your car in a consumer proposal. Provided that your vehicle’s value is within the allowable exemption limits. According to the Bankruptcy and Insolvency Act (RSC 1985, c 11), Section 67, certain assets are exempt from being seized by a trustee, including a vehicle of modest value. The specific exemption amounts can be found in the regulations, which outline the limits for personal property ownership during a consumer proposal. It is essential to confirm that your car’s equity (market value minus debts owing against it) does not exceed the permitted thresholds. If the equity is within these limits, you may retain the vehicle while undergoing the consumer proposal process.

From: OSB Helper

Related Questions to Keeping A Car In A Consumer Proposal

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 scheduled payments.

2. What happens to my car loan in a consumer proposal?

You must continue to make your regular car loan or lease payments to avoid repossession.

3. Can I keep my car if it is financed or leased in a consumer proposal?

Yes, you can keep your financed or leased car if you maintain the payments.

4. Will my car be seized if I file a consumer proposal?

No, your car will not be seized as long as you keep up with your car loan or lease payments.

5. How does the value of my car affect my consumer proposal?

The value of your car may affect how much you need to offer creditors in your proposal, especially if its value exceeds your provincial exemption limit.

These questions reflect common concerns and are frequently searched online by individuals considering a consumer proposal.

If you have a question about debt see our debt questions or ask your own debt related question.

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