Update to the Exemption for Automobiles

On June 22, 2006, new legislation was passed in Ontario dealing with the equity in an automobile in a bankruptcy. Prior to June 22, 2006, an automobile was exempt from seizure if its value was less than $5,650. For example, if the car was valued at $5,550 it was not seized by the trustee, but if it was worth $5,651 it was seized or the bankrupt had to pay the trustee the value of $5,651.

Under the new legislation, the first $5,650 is exempt from seizure. For example, if the car is valued at $5,700, the bankrupt person has to pay the difference of $50 ($5,700-$5,650) to the trustee.

This new wording will help people filing for bankruptcy get a fresh start.

To discuss your financial situation and develop a plan that is right for you, call a Hoyes, Michalos and Associates office near you at 310-PLAN or e-mail a question.

Posted by Rebecca Martyn, CGA, CIRP, Trustee @ 3:54 PM

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