Can I Keep My Car or House in a Consumer Proposal — or in Bankruptcy?

One of the most common concerns people bring to their first consultation is whether they'll lose their home or vehicle. The answer depends on which path you take — and the two options work very differently.

In a Consumer Proposal, You Generally Keep Everything

Because a Consumer Proposal is a negotiated agreement with your creditors rather than a liquidation process, your assets — including your house and car — generally aren't at risk. As long as you keep up with your proposal payments and continue paying any secured debts, like a mortgage or car loan, as usual, you keep what you have.

In Bankruptcy, Assets Are Subject to Exemptions

Assets in a bankruptcy are usually subject to the rights of secured creditors and to provincial and federal exemptions. In British Columbia, a bankrupt is entitled to retain up to $5,000 in equity in one motor vehicle. If you have more equity than that, or a second vehicle, there is usually an opportunity to repurchase the excess equity — or the second vehicle — from the Trustee or the bankrupt estate.

The same principle applies to other assets: BC law protects a set amount of equity in your principal residence, household items, and tools of your trade. What matters is equity — what the asset is worth after any loan against it — not the asset's full value.

Every Situation Is Different

The right answer depends on your specific assets, debts, and circumstances. A free consultation with a Licensed Insolvency Trustee is the best way to understand exactly how a Consumer Proposal or bankruptcy would apply to you — and which option keeps you in the strongest position.

Book your free consultation here.