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407-Debt

407 Debt

The Short Story:

As of January 27, 2015, people who have completed their bankruptcy or consumer proposal still can’t renew their license plates or obtain new ones until their 407 debt has been paid in full.

The Long Story:

When the 407 was built, provincial legislation called the “407 Act” was passed by Ontario’s legislature.  This allowed the 407 to report non-payment of tolls to Ontario’s Registrar of Motor Vehicles.  Once reported to the Registrar, individuals with unpaid tolls were prevented from renewing existing license plates or obtaining new license plates.

Federal Law, known as the Bankruptcy and Insolvency Act aims to provide debtors with a “fresh start” after completing a bankruptcy or consumer proposal.  The Office of the Superintendent of Bankruptcy has taken the position that the 407’s position conflicts with this “fresh start” principal and that Federal Law trumps Provincial Law due to a legal concept known as “Federal Paramountcy“.

While the issue was original brought before the courts by an individual seeking an order of the court that would compel the Registrar of Motor Vehicles to renew his license plates, that individual eventually settled his debt with the 407 and the issue was taken up by the Office of the Superintendent of Bankruptcy. (“OSB”)

While the Court ruled in favour of the OSB on December 19, 2013, the 407 and Registrar of Motor Vehicles continue to refuse to issue license plates where 407 debts are outstanding while they appeal the December 2013 decision before the Supreme Court of Canada.  Until that hearing is complete, the 407 and Ministry of Transportation will continue to deny license plates to individuals with outstanding amounts owing to the 407.

Conclusion

If your 407 debt is your only debt, then filing a consumer proposal or assignment in bankruptcy likely doesn’t make sense until the supreme court rules on the matter.

If 407 debt is only a fraction of your total debt then it is unlikely to affect the benefits that you would realize by filing a consumer proposal or assignment in bankruptcy.

If you’re dealing with debt, whether it’s 407 or any other kind of debt, then give us a call.  We’ll take the time to review your unique personal situation at any one of our conveniently located offices and explain your options to you.  Get the facts, and make an informed decision about dealing with your debt.  We’re licensed by the Federal Government and solve debt problems like yours every day.  What are you waiting for?  You’ve got nothing to lose except your debt!

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