Question: |
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My husband and I are likely going into bankruptcy very shortly. I just had my vehicle checked out and the mechanic said it is not worthwhile to fix it. I need a vehicle for getting to and from work, volunteer activities, and general other things. We have about 1500.00 saved up for a 'rainy day fund'. Can I use this to purchase a vehicle prior to filing without having to give the vehicle up? My husband has his own vehicle for work also which would be valued at about 3500.00. Would we both be able to keep a vehicle?
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Answer: |
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In Alberta, a debtor is entitled to claim an exemption for up to $5,000 equity in a vehicle so both you and your husband would each get to make an claim thus allowing you to keep both vehicles. If you go and purchase a vehicle just before bankruptcy, this fact would have to be disclosed to your creditors at the time you file. Turning a nonexempt asset (i.e. cash) into an exempt asset (i.e. a vehicle) on the eve of your bankruptcy is not acceptable, however, given the amounts involved, it is likely that no creditor would object.
Bruce Alger
phone: (403) 296-2970
balger@alger.ca
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