Consumer Proposals
One of the most common concerns Manitoba residents have when considering bankruptcy is whether they’ll lose their car or house. The good news? Bankruptcy laws offer some asset protection.
Here’s what you need to know:
1. Manitoba Exemptions Help Protect Essential Assets
In Manitoba, certain assets are exempt from seizure in a bankruptcy.
2. What Happens to Your Car?
If the equity in your vehicle is less than $3,000, you usually get to keep it. If it’s worth more, you may have to pay the difference to your trustee or surrender the vehicle.
Leased vehicles or cars with loans will likely still be kept if you continue making payments and the lender agrees, which they usually do.
3. What About Your House?
If you have little equity in your home and are up-to-date on your mortgage, it’s possible to keep your house in bankruptcy. The Licensed Insolvency Trustee will assess your situation and may allow you to repurchase the equity value rather than the house being sold.
4. Secured vs. Unsecured Debt Matters
Mortgages and car loans are secured debts. If you want to keep the asset tied to the loan, you’ll need to maintain your payments on those debts even during bankruptcy.
5. Alternatives to Protect Your Assets
If you’re concerned about losing property, a consumer proposal may be a better option. This allows you to settle your debts without surrendering assets.
Real-Life Manitoba Example:
A single mother in Portage la Prairie filed for bankruptcy with a modest home and a reliable car. She kept both because her equity fell within provincial exemption limits and she maintained her mortgage and car loan payments.
Final Thoughts:
Filing for bankruptcy doesn’t automatically mean losing everything. Manitoba’s laws are designed to protect what you need to live and work. At Lazer Grant, our Winnipeg team will review your assets and provide options to help you retain as much as possible.
Book a free consultation today to explore your options and protect your future.
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