Can I keep my car when filing for bankruptcy?
Yes, you can keep cars and motorbikes up to a total auction value of $8,000. However, there are a few things that you will need to keep in mind.
The guidelines on vehicles and ownership during bankruptcy
If the vehicles are financed by lease or hire purchase, they can have equity which is based on the auction value of the vehicle (equity equals the value of vehicle less amount owing) of up to $8,000. For your continued use of a financed vehicle you will have to continue making the monthly payments on the loan.
If you and your partner jointly own a car and are both becoming bankrupt, the car can have an auction value of up to $16,000
If you have a financed vehicle which is worth less than the amount owing on the loan, the lender will normally let you keep the car provided you continue making the monthly payments.
If you own a car which has an auction value of $8,000 and also have a car that is financed by hire purchase or lease with the loan payout exceeding the value of the car (no equity), you would be able to keep both vehicles as the combined equity does not exceed $8,000. You would however, have to continue making the monthly hire purchase or lease payments on the financed car.