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A leased car is a secured asset. That means that car can be seized as security if the conditions of the lease are broken (see Cars & Vehicles during Bankruptcy). Although many lease contracts have an insolvency clause that allows for termination of the lease, the car company prefers not to end the lease as long as they feel reasonably confident that you will meet your payments. Either you or your trustee should contact the lease company to discuss your status and find out their position in advance of filing for bankruptcy.
During the financial counselling sessions provided by your trustee, it may become clear that you are better off not owning a car—the lease, maintenance, gas, insurance, and parking fees may be part of the reason that you need to declare bankruptcy. Even if you need a vehicle for work or family reasons, it may be wiser to allow the lease agency to reclaim your current car and buy a used car below your provincial asset exemption value.
IN THIS SECTION
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