bankruptcy Winnipeg

By: Bankruptcy Winnipeg  09-12-2011

Question: My dad seems to be in some trouble and I have some questions and concerns I hope you can help me with.
I live on a farm with my parents. My dad personally owes approximately $125,000 to various creditors, not including the mortgage on the house we live in. The mortgage is in both my mom and dad’s name as is the title for the land. We have approximately 80 acres on our farm. He is able to make the mortgage payments and the payments are up to date and the taxes and utilities are up to date. The mortgage balance is approximately $65,000. He has no savings. My dad has a vehicle that is worth more than $3000 and one that is worth maybe $1500 if that and does not run properly. He has a loan on the vehicle that is worth more than $3000. He needs the vehicle to get to and from work as we live in rural Manitoba and there is no bus or cab service available to us. I am worried that if he does have to declare bankruptcy that we will lose the house. My mom is also worried that the creditors will come after her for money even though she is not attached to any of his debts other than the mortgage. None of the bank accounts are joint except for the one the mortgage payments come out of. We still need and want to keep the house otherwise we will have nowhere to live. My mom and I just recently moved to the farm as she could not afford to live on her own due to her medical expenses that total approximately $3000/month. I have done a little bit of research on various bankruptcy websites, and am not clear on what would be allowed to be kept in the event he has to declare bankruptcy. The main concern is the house and land and possibly the vehicle that’s worth more than $3000. Is he able to declare bankruptcy for all other creditors except for the bank that the mortgage is at and the bank that the vehicle that’s worth more than $3000 is at because he/we need these? Or does he have to include all creditors?
I have tried to include as much information as possible. Thank you in advance for any information you can give me.

(a) the furniture and household furnishings and appliances of the judgment debtor reasonably necessary for one household but not exceeding in value the aggregate sum of $4,500.;

(b) the necessary and ordinary clothing of the judgment debtor and the members of his family;

(c) the food and fuel necessary for the judgment debtor and the members of his family for a period of six months, or the cash equivalent thereof;

(d) in the case of a judgment debtor who is a farmer, all animals reasonably necessary for the proper and efficient conduct of his agricultural operations for the next ensuing 12 months;

(e) in the case of a judgment debtor who is a farmer,

(i) all farm machinery, dairy utensils and farm equipment reasonably necessary for the proper and efficient conduct of his agricultural operations for the next ensuing 12 months, and

(ii) one motor vehicle, if required for the purposes of his agricultural operations;

(f) the tools, implements, professional books and other necessaries, not exceeding in value the aggregate sum of $7,500., used by the judgment debtor in the practice of his trade, occupation or profession or to carry on his business and, where the judgment debtor requires the use of a motor vehicle in the course of or for the purposes of his employment, trade, occupation, profession or business or for transportation to and from his place of employment or business, one motor vehicle not exceeding in value the sum of $3,000.;

(g) the articles and furniture necessary to the performance of religious services;

(h) the seed sufficient to seed all the land of the judgment debtor under cultivation;

(i) the health aids, including but without limiting the generality of the foregoing a wheelchair, an air-conditioner, an elevator, a hearing aid, eye glasses and prosthetic or orthopedic equipment, that are reasonably necessary for the health or mobility of the judgment debtor or a member of his family; and

(j) the chattel property of The City of Winnipeg or of any municipality, local government district, school district, school division or school area in the province.

As you can see, basic goods are exempt from seizure, but this is a very complicated area of law.  In addition, there are other factors to consider.  While the law may indicate your father can keep an asset, cash flow and other considerations may dictate that he should not.

The information in this article was current at 06 Dec 2011

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