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Difference between revisions of "Creditors' Remedies against Debtors (10:III)"
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Creditors' Remedies against Debtors (10:III) (view source)
Revision as of 22:10, 2 October 2022
, 22:10, 2 October 2022→3. Exemptions from Seizure
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The secured creditor takes the secured goods subject to the security interest of the conditional seller or chattel mortgagee. Where the debtor is a conditional buyer or a chattel mortgagor, a sheriff or bailiff may seize secured goods. Sheriffs, however, are usually reluctant to seize collateral unless there is clearly equity in it. In such cases, the secured creditor cannot seize a greater interest than the debtor has. | The secured creditor takes the secured goods subject to the security interest of the conditional seller or chattel mortgagee. Where the debtor is a conditional buyer or a chattel mortgagor, a sheriff or bailiff may seize secured goods. Sheriffs, however, are usually reluctant to seize collateral unless there is clearly equity in it. In such cases, the secured creditor cannot seize a greater interest than the debtor has. | ||
'''Sections 71( | '''Sections 71(3) and (4) set out three exceptions to the personal property exemptions provided in s 71(1) of the ''COEA'':''' | ||
:a) the debtor cannot exempt goods identical to the goods that were the subject of the contract in question; | |||
:b) a trader cannot claim any goods that are part of their stock-in-trades; and | |||
:c) corporate debtors cannot avail themselves of the personal property exemption. | |||
In addition, s 65 of the "Insurance Act", RSBC 1996, c 226 allows for the exemption of certain insurance policies. Under s 65(1), if a beneficiary is designated, the insurance money, from the time of the happening of the event on which the insurance money becomes payable, it is not part of the estate of the insured and not subject to creditors of the insured. Under s 65(2), while there is in effect a designation in favour of a spouse, child, grandchild or parent of the insured, the insurance money and rights or interests of the insured in the money and in the contract are exempt from execution or seizure. | In addition, s 65 of the "Insurance Act", RSBC 1996, c 226 allows for the exemption of certain insurance policies. Under s 65(1), if a beneficiary is designated, the insurance money, from the time of the happening of the event on which the insurance money becomes payable, it is not part of the estate of the insured and not subject to creditors of the insured. Under s 65(2), while there is in effect a designation in favour of a spouse, child, grandchild or parent of the insured, the insurance money and rights or interests of the insured in the money and in the contract are exempt from execution or seizure. | ||
The ''Bankruptcy and Insolvency Act'', 1985, s 67(1)(b.3) now shields all RRSP contributions from seizure in a bankruptcy, except those made in the 12 months prior to bankruptcy. | |||
Certain interests have been held to fall outside s 71 and therefore are not exempt from seizure. Partial interest and equitable interests do not fall within s 71 and thus, for example, a purchaser under a conditional sales agreement cannot prevent seizure of the goods sold under the agreement. Similarly, the section does not apply to a charging order or a garnishing order since the section only refers to “forced seizure and sale”. Thus, monies in court and debts or wages being garnished cannot form part of the judgment debtor’s exemption under the ''COEA''. | Certain interests have been held to fall outside s 71 and therefore are not exempt from seizure. Partial interest and equitable interests do not fall within s 71 and thus, for example, a purchaser under a conditional sales agreement cannot prevent seizure of the goods sold under the agreement. Similarly, the section does not apply to a charging order or a garnishing order since the section only refers to “forced seizure and sale”. Thus, monies in court and debts or wages being garnished cannot form part of the judgment debtor’s exemption under the ''COEA''. | ||