Bankruptcy and Your Existing Car Loan
Very often we get this question: I am a bankrupt and I am servicing an existing car loan, the bank did not repossess the car, shall I continue to service the car loan?
If a person is made bankrupt in the year 2016 and the car loan has been running since 2015 for 5 years, the catch is that once you have finished servicing the car loan in year 2020, you will not be able to “enjoy” the proceeds from the sale of that car. All properties of the Bankrupt will vest (belong) to the Director General of Insolvency.
A more practical approach is probably to sell the car once the person is made a bankrupt and give the balance proceeds of the sale after paying the bank to the Director General of Insolvency.
The Bankrupt may continue to work and his employer may of course, depending on the circumstances and requirements of the job, provide him with a car.
For application of discharge and annulment please click here.