If you rented your car, it does not belong to you and will not be affected by bankruptcy. If you continue to make payments on time, you can continue to use the vehicle.
On the other hand, if you are late in your payments, the company that rented you the vehicle could take it back, but this is applicable even if you do not go bankrupt.
You have financed your vehicle and you have not completed the payments
In the event that you have financed your vehicle (installment sale contract), you have two options: If you want to keep the vehicle: continue to make payments on time and you can keep the vehicle in most cases. If you can no longer make the payments:
You can surrender the vehicle to the Trustee and the remaining debt will be included in your bankruptcy. The remaining debt is normally the loan balance minus the value of the vehicle.
Your vehicle is fully paid
Due to the changes to the Code of Civil Procedure of January 1, 2016, you may retain your passenger vehicle if it is:
- necessary for your work or
- necessary for your active job search or
- necessary for your livelihood or
- necessary to for your health care or
- necessary for your education or that of someone in your care.
Nevertheless, your vehicle could be seizable if:
- you can ensure your essential travel using public transit or
- you have access or could have access to a vehicle of lesser value.
What if my vehicle is seizable but I want to keep it?
If ever your vehicle is seizable, but you want to keep it, it is possible to compensate your creditors. This means that you agree to pay the trustee an amount equal to the market value of your vehicle and so you remain the owner.
If your vehicle is seizable but you do not want to compensate your creditors, the vehicle will simply be handed over to the trustee and you will not be liable.
If the value of your vehicle is high and you want to keep it, you could consider the consumer proposal . Depending on your situation, a consumer proposal could allow you to settle your debts while keeping your vehicle. Read our consumer proposal page for more information.