My son is considering personal bankruptcy. He has dug into a fair bit of debt and hasn't been able to find work for a few months. He therefore let his insurance lapse on his car as well as his payments. He got his car impounded as well as fines for no insurance and no registration, and now cannot get his car out of impound because of the costs and the bank has also called on his loan. Total value of what he owes is probably around $25,000. What I am wondering is if he does declare a bankruptcy what does this do to his fines? Does he still have to pay them? And his loan is secured by the car which they will take back, but it is impounded right now. Suggestions I could give to him? Thanks

If he files for bankruptcy the vehicle would likely be repossessed by the bank if it was worth them retrieving it from the impound lot. The deficiency would be covered in the bankruptcy. I'd suggest your son advise the bank immediately that the vehicle has been impounded. Fines are not dischargeable by bankruptcy and he will have to pay them.

Ann Clarke
phone: (403) 296-2972
aclarke@moneyhelp.ca