Change in the Ontario Law Regarding Automobile Exemptions
On June 22, 2006, the Ontario Government approved the new Good Government Act. One part of this new legislation is a revision to the rules concerning automobile exemptions under the Ontario Execution Act. This Act outlines what assets are exempt from seizure (i.e. what individuals can keep) in a bankruptcy scenario. The current automobile exemption limit in Ontario is $5,650, but the change in the law deals with automobiles worth more than $5,650.I will demonstrate the change through an example: a person from Guelph filed personal bankruptcy and one of her assets was a mini-van valued at $6,500 (the van did not have any liens against it). If she had filed personal bankruptcy prior to June 22, 2006, she would have to pay $6,500 to the trustee to keep the car or the trustee would be required to sell the vehicle as the vehicle was greater than the exemption limit.
If she files personal bankruptcy under the new rules, the first $5,650 is exempt and the she could pay the difference of $850 ($6,500-$5,650) to the trustee and keep the vehicle. As the Guelph area only has limited public transit, vehicles can be essential to drive children to school and to get to and from work, therefore this change in the law may help individuals in Guelph with keeping their vehicles in a personal bankruptcy situation.
At Hoyes, Michalos & Associates Inc. in Guelph, Ontario, we review individual's situation and help them develop a plan to deal with their debts and meet future goals, so to discuss your situation in greater detail e-mail us a question or give our Guelph office a call at 519-823-0330 or 310-PLAN to arrange a free consultation.
Related links:
Good Government Act 2006 (see Schedule B Ministry of the Attorney General, Section 6(1) Exection Act)
Ontario Execution Act limits
Ontario Execution Act
posted by Scott Schaefer, CA @ 1:59 PM
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