A1 Debt Assistance - providing you with all the Bankruptcy information for Australia
 1300 79 74 73 - free phone consultation
e: info@a1debtassistance.com.au
As seen on A Current Affair 
What happens to your car if you go bankrupt?
There are a few scenarios that we have to consider.
1 - you own the car and do not have any secured loan against the title of the vehicle.
If you are the owner of the car and have no loan against it, the value of you car can not exceed $7050. This is the threshold. Any car with a value below this - its yours, no drama. However, be careful with this valuation - a car yard will advertise a car for sale at a retail price, the actual value would be an auction value. So get the auction value - if A1 Debt Assistance handles your file, we do this for you, no need to do any searches.
Now let's say that your car is still valued at more than the threshold. The Trustee can arrange for your car to be sold and use the funds to pay towards your debts. You may also be able to negotiate the difference between the actual value and the threshold and pay this off to the trustee - thus keeping your car. This is at the discretion of your Trustee - a Government appointed Trutsee is certainly your best option here. If you have a company car as well or not is irrelevant.
Any further questions on this - call 1300 79 74 73 or e: info@a1debtassistance.com.au
2 - you own your car, but it is the family car and half belongs to your spouse/ partner who also drives.
The way this situation gets worked out is based on the above princible, but now the car can be valued at $14,100. Your share of the car is still only $7050. Whatever you do, do not transfer your car into somebody else's name prior to entering in to Voluntary Bankruptcy. This would be a form of deception and Bankruptcy Fraud, which will carry severe consequences. Friends and family may tell you to do this and I am sure they mean well, but they do not know the Bankruptcy Act.
Any further questions on this - call 1300 79 74 73 or e: info@a1debtassistance.com.au
3 - you have a car loan or a secured loan against the vehicle.
Ok, so you have a car and it is leased or under finance in some way shape or form. The value of the car now becomes irrelevant as long as you can afford to continue your regular loan repayments and your equity is not more than $7050. You have to be careful with this and A1 Debt Assistance will advise you on what to do if we do your bankruptcy documents, such as the required Debtors Petition and the Statement of Affairs.
The key is that your car becomes an asset if your loan is finalised prior to the completion of your bankruptcy term, which under normal circumstances is only 3 years. Many car loans have a balloon payment at the end. If you have this, than you will have a problem to re-finance your car at the end of the loan as you will not get a loan for the balloon, considering you are a bankrupt. To overcome this, you need to contact your credit provider and explain your situation. Tell them you are entering into voluntary bankruptcy and that you would like to change your loan prior so that the balloon payment is included in the total loan now and your repayments will stay the same but will be stretched over a longer period. As long as you are open and up-front with your Lender they will usually do this for you. They know that repossessing your car now would cost them money they do not need to lose. Given you are debt free once you are officially bankrupt, the lender is aware of the fact you are freeing up money to place you in a better position to pay your car loan. Just make sure you tell them the full truth, otherwise it means you obtained credit by deception. If we handle your full service, we will talk you through the steps.
Any further questions on this - call 1300 79 74 73 or e: info@a1debtassistance.com.au
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visit A1 Car Ads at www.a1carads.com.au
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A1 Debt Assistance Australia
www.a1debtassistance.com.au
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