New Rules: Brantford Residents More Likely to be able to Keep Their Car if they go Bankrupt
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
posted by J. Douglas Hoyes, CA, Trustee @ 9:59 PM
0 comments
