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Vehicle Exemptions Rules Change in Ontario
The Ontario Government approved the new Good Government Act in June 2006. The legislation covered a large variety of laws, but one part of this new law deals with the rules around vehicle exemptions and bankruptcy. The Ontario Execution Act provides limits for what assets are exempt (i.e. can be kept) when a personal bankruptcy is filed. The current vehicle exemption limit in Ontario is $5,650 but the change in the law deals with the case of a vehicle worth more than $5,650.To explain the change, I will use an example: an individual from Hamilton files personal bankruptcy and he owned a vehicle with no liens which had a market valued of $6,500. If this person had filed personal bankruptcy prior to June 22, 2006, as the vehicle value is above the limits, the rules would require the person to pay $6,500 to the trustee to keep the car or the trustee would be required to sell the vehicle.
If he filed personal bankruptcy after the rule change, the first $5,650 is exempt and the person could just pay the difference of $850 ($6,500-$5,650) to the trustee and keep the vehicle. In the Hamilton area, vehicles are a mode of transportation many could not live without, therefore this updated law may assist individuals in Hamilton with keeping their vehicles and getting a fresh start through a personal bankruptcy.
At Hoyes, Michalos & Associates Inc. in Hamilton, Ontario, we review the individual's situation and help them develop a plan to deal with their debts and meet their future goals, so to discuss your situation in greater detail or give our Hamilton office a call at 905-777-0770 or 905-310-PLAN or e-mail us to arrange a free meeting to discuss your situation in more detail.
posted by Scott Schaefer, CA @ 10:57 AM
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