Ontario Protects Home Equity From Creditor Actions

KITCHENER, ON, Nov. 9, 2015 /CNW/ - Effective December 1, 2015, Ontario will increase thresholds for items that are protected from actions taken by a person's creditors, even when they file for bankruptcy. Changes to the Execution Act will also see the addition of a new exemption for home equity up to a maximum of $10,000.

The Ontario Execution Act defines the exemption of goods from seizure by creditors. It applies to creditors who have successfully sued a debtor and received a Writ of Seizure or Execution, and overrides the Bankruptcy & Insolvency Act. "The purpose behind the Act is to ensure that a debtor is not deprived of the necessities of life" said Ted Michalos, a bankruptcy trustee with Hoyes, Michalos & Associates Inc. "Ontario law has always exempted certain assets, within limits, including a motor vehicle, personal possessions and tools needed to earn a living, however, the dollar limits have not been increased since 2005."

The addition of an exemption for a specified amount of home equity brings Ontario legislation in line with other provinces including British Columbia, Alberta, Saskatchewan, Manitoba, Quebec and Newfoundland & Labrador. "The fear of losing one's home is one of the greatest concerns faced by individuals facing financial problems today" said Douglas Hoyes, a bankruptcy trustee with Hoyes, Michalos & Associates Inc. "While options like a consumer proposal can help families retain their home, this exemption will make bankruptcy or a consumer proposal less costly for many insolvent homeowners across Ontario."

The new limits under the Execution Act include:

• Necessary clothing - unlimited
• Household furnishings and appliances - $13,150
• Motor vehicle - $6,600
• Tools of the trade - $11,300
• Livestock, tools for farmers - $29,100
• Principal residence - $10,000 (new)

About Hoyes, Michalos & Associates, Inc.

Hoyes, Michalos & Associates Inc., a consumer proposal and trustee in bankruptcy firm with offices throughout Ontario, helps people in financial difficulty.  Further information is available at www.hoyes.com

KEY CHANGES TO EXEMPTION LIMITS

PRE DECEMBER 1, 2015	AS OF DECEMBER 1, 2015
Necessary and ordinary apparel - $5,650	Necessary clothing - no limit
Household furniture, utensils, equipment, food and fuel - $11,300	Household furnishings and appliances - $13,150
Motor vehicle - $5,650	One motor vehicle - $6,600
Tools of the trade $11,300 (farmers $28,300)	Tools of the trade $11,300 (farmers $29,100)
	Personal property prescribed by the regulations - no amount prescribed, therefore $0
Principal residence - no amount prescribed, therefore $0	Principal residence - $10,000

For more information on how these changes will affect Ontarians see Ontario Bankruptcy Exemption Law Changes Will Protect Home Equity

SOURCE Hoyes, Michalos & Associates Inc.

Douglas Hoyes, CPA, Trustee in Bankruptcy, [email protected]; Ted Michalos, CPA, Trustee in Bankruptcy, [email protected]; 1-866-747-0660