Good News on Exemptions for Vehicles
Until April 15, 2001 there was no exemption amount for vehicles in the Province of Ontario. On that date, the provincial government changed the Execution Act so that vehicles with a value of $5,000 or less would be exempt from seizure.
Because of a glitch in the writing of the new exemption, a court case which is referred to as Fields gave a ruling that if the value of a vehicle was greater than $5,000, there could be no exemption amount claimed by the debtor.
On December 14, 2005, the exemption value for vehicles was changed from $5,000 to $5,650 but the value problem still remained.
The good news is that on June 22, 2006, the Government of Ontario passed the Good Government Act, 2005. In that Bill, a new section was added to the Execution Act such that if the value of a vehicle is greater than $5,650, the debtor is allowed the amount of $5,650 plus costs of the sale. In a consumer proposal or a personal bankruptcy this means that if a vehicle is valued at more than $5,650 after selling costs are calculated, the debtor could “purchase” the difference between the value and $5,650 from the trustee.
If you are experiencing financial difficulties and are worried about losing your vehicle, please contact our offices at 310-PLAN or local to London 519-435-1500 to set up an appointment to discuss your situation in detail.
