Archive for June, 2006

As the trustee responsible for the Hoyes Michalos bankruptcy office in Brantford since 1999 it has been my experience that most residents of Brantford own a car or truck, and most people use their motor vehicle to get to work, often outside of Brantford.

Many people live in Brantford because housing costs are more reasonable than other parts of Ontario, but work in larger cities where jobs are more plentiful and pay better, like London, Cambridge, Hamilton, Mississauga and Toronto.

Unfortunately the fact that you need a car to get to work does not mean you can keep your car if you go bankrupt in Brantford. Prior to April 15, 2001, if you went bankrupt in Ontario, you were required to surrender your car to the trustee, or pay the trustee the value of the car. On April 15, 2001 the rules changed to make a $5,000 car exempt in a bankruptcy, and on December 14, 2005 that limit was increased to $5,650.

However, an Ontario Court of Appeal court case decided that only cars under the exemption limit were exempt, so if you went bankrupt in 2004 and owned a $6,000 car with no liens against it, you were required to pay the trustee $6,000 if you wanted to keep your car.

Now for the good news for residents of Brantford, and everywhere else in Ontario. Today, June 22 2006, the Ontario government gave third reading, and Royal Assent, to Bill 190, the Good Government Act, 2006. I won’t bore you with the legalities of this new legislation, other than to say that buried deep in the almost 200 pages of this bill is a change to the Ontario Execution Act that now allows a bankrupt to retain their motor vehicle by only paying the equity to the trustee.

Continuing with our previous example, if you own a car worth $6,650 with no liens against it, thanks to these new rules, instead of paying the trustee $6,650 to keep your car while bankrupt, you now only need to pay the difference above the exemption limit, or $1,000, to keep your car.

I believe these new rules will help many Brantford residents who need their car to get to work, but have more debt than they can handle and need to go bankrupt. It will be easy to keep their car and still get the relief they need.

These rules have changed four times in the last five years, and they may change again, so if you own a car and have more debt than you can handle, please call our office in Brantford at (519) 770-4440 or e-mail us for more information.

personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario

Over the years Brantford, Ontario has suffered some significant job losses. The biggest job loss probably occurred in 1988 when Massey Ferguson went out of business in Brantford, and Brantford’s unemployment rate peaked at almost 14% in 1993, as seen in this chart:

I was reminded of this when I learned this week that Raymond Industrial Equipment Ltd., a large forklift and pallet truck manufacturer and a significant employer in Brantford since 1966, was laying off about 50 full time employees, and other contract employees will also lose their jobs. Approximately 400 employees will remain at the plant, but the employees who lose their jobs will have to replace this job with another hopefully well paying job.

Last year employment in Brantford grew by 5.5% (after declining 3.3% in 2004), so it’s no surprise that the personal bankruptcy rate in Branford fell 2.3% in 2005. (481 consumer proposals and bankruptcies were filed in 2004, falling to 470 in 2005). Clearly, employment does have a significant impact on the rate of bankruptcy in Brantford, and it’s easy to see why.

While people are working, they have the cash flow to pay their living expenses and service their debts. As soon as they lose their job they may be forced to use credit cards and lines of credit to survive. This increases their debt, and without an income to pay the debts, the debts increase, often leading to personal bankruptcy.

If you have lost your job, or had your hours reduced at work, and if that has caused debt pressure, feel free to give my office a call in Brantford at (519) 770-4440 or e-mail us to set up a free consultation to review your options, and determine what needs to be done to get back on track.

personal bankruptcy, bankruptcy Brantford, bankruptcy Ontario