There is nothing that prevents you from buying a car while you are bankrupt. If you are financing the purchase of a car, you must disclose that you are an undischarged bankrupt. This is the period between the date you filed the assignment in bankruptcy and the date that you are discharge from the bankruptcy process.
Even if you do not disclose this, the company financing the car will find out when they get a credit report on you. Now you have lost credibility which may result in a higher interest rate due to the risk factor or they will cut back on the amount they are willing to loan you. You might have to settle for a less expensive car that does not require a lot of financing. In Ontario, a vehicle is exempt up to a value of $6,600. If the vehicle is required as a “Tool of Trade”, the required exemption is increased to $11,300.
It would be wise to discuss your budget with your Licensed Insolvency Trustee (LIT) at the start of your bankruptcy as the Bankruptcy and Insolvency Act (Directive 11 R2) may result in you having to pay part of your income to your creditors. If someone in your family is giving you the money for the car, they should register a lien on the car for the amount of the money that they are giving you. This will make sure there is no equity that will accrue to your creditors. In the same thought, someone may give you a car while you are bankrupt in order to help you. You do not want your trustee to consider this as an asset for your creditors.
Consider the options:
1. Lease the car in their name and add your name to the insurance. Consider increasing the insurance to give the family members maximum protection.
2. If the vehicle is transferred into your name, the donor could put a lien on it for the value of the car.
There are always options for you to consider. Please discuss them with your trustee.
Decreasing independence is not something that anyone likes to think about, but needing help making legal and financial decisions can happen at any time and for a wide range of reasons. If you’re a senior citizen, you should begin planning ahead for your future. If you get ill, have an accident or even if you are just away for a period of time, having someone you trust who is ready and able to help you can save time and trouble.
In other words, plan ahead, appoint a power of attorney and sign a power of attorney document. This is a legal document in which you name one or more people to be your attorney (decision-maker) to manage your financial affairs.
This is an important plan because you need someone you can trust to look after your affairs if you can no longer look after them yourself.
Taking precautions to avoid scams and frauds is another way to protect your assets against financial abuse. Hustlers are constantly coming up with new scams to deceive elderly people. It is important to never respond to e-mail, phone or door-to-door offers from people or groups you do not know. Most often, if an offer seems too good to be true, one can assume it is. Protect your personal information–reputable organizations will not e-mail, write or call and ask you to confirm information about your bank account or financial affairs. Financial abuse is illegal and/or unauthorized use of your money or property, or pressure on you for use of your money or property.
Unfortunately and sadly, abusers are often people in positions of power in your life, such as a family member, caregiver or someone you live with. If you think you may be the victim of financial abuse, a fraud or a scam, do not feel ashamed and you are not at fault–many people are in the same situation and it is important you do not stay silent. Tell someone you trust about what is going on and how you are being treated and take precautions. If you do not feel you can trust anyone or do not feel comfortable talking to someone you know, you can report financial abuse and/or fraud to the police.