Finance:Tools of trade
The tools of trade are items that are exempt from attachment under bankruptcy law or from seizure. The exemption exists in many jurisdictions. For examples:
- In England, the Bankrupts (England) Act 1825 (6 Geo IV) included it in a short list of exemptions: "tools of trade, necessary household furniture, and the wearing apparel of himself, his wife and children".[1][2] The Bankruptcy Act 1883 and the Bankruptcy Act 1890 contained the same exception.[3] The Bankruptcy Act 1914 contained an exception.[4] The Insolvency Act 1986 that is nowadays applicable states "such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation".[5]
- In Australia the Bankruptcy Act 1966 exempts the "ordinary tools of trade, plant and equipment [...] ordinary professional instruments and professional reference books".[6][7]
- All of the provinces of Canada have a tools of trade exemption in their various bankruptcy laws.[8]
- In the United States, the Bankruptcy Code (USC 2) §522(f) exempts implements, professional books, and tools of the trade.[9]
All of these owe this exemption to the provisions for bankrupts that existed in English common law before it was codified by statute.[10]
What exactly constitute one's tools of trade comes down to case law,[11] and the case law of the United States exemplifies how complex such case law often is. Farmers have claimed mechanical cream separators.[11] A professional forest guide claimed his canoe as exempt, but was not allowed to claim his rifle.[11] A car used only for commuting to work is not a tool of the trade, but a motor vehicle can be, including a farm tractor.[12] Breeding stock can be, as can be a logging truck and trailer.[12] However, some cases have limited the exemption to personal hand tools and not large machinery or power tools.[12][11]
England and Wales
Under the Courts Act 2003, "such tools, books, vehicles and other items of equipment as are necessary to the execution debtor for use personally by him in his employment, business or vocation" are exempted from seizure under a writ of execution issued from the High Court.[13] Under the Proceeds of Crime Act 2002, "such tools, books, vehicles and other items of equipment as are necessary for use personally in the defendant's employment, business or vocation" are exempted from seizure under section 47C(1) of that Act.[14]
References
What supports what
- ↑ Archbold, Chitty & Prentice 1840, p. 826.
- ↑ Holt 1827, p. 551.
- ↑ Ringwood 1902, p. 73.
- ↑ The Bankruptcy Act 1914, section 38(2). This provision was amended by the Insolvency Act 1976. See further (1987) 106 Law Notes 53
- ↑ Wood 2007, p. 846.
- ↑ Lewis & Rose 1978, p. 117.
- ↑ Turner 1997, p. 956.
- ↑ Ziegel 2003, p. 22.
- ↑ Ziegel 2003, p. 66.
- ↑ NDLR 2010, p. 563.
- ↑ 11.0 11.1 11.2 11.3 Black 1922, p. 552.
- ↑ 12.0 12.1 12.2 Salerno & Kroop 2007, p. 5—54.
- ↑ The Courts Act 2003, Schedule 7, paragraph 9(3)(a). This replaces section 138(3A)(a)(i) of the Supreme Court Act 1981, which was inserted by section 15(1) of the Courts and Legal Services Act 1990.
- ↑ The Proceeds of Crime Act 2002, section 47C(2)(b) and (4)(a)
Sources
- Archbold's Practice of the Court of Queen's Bench. H. Sweet. 1840. https://archive.org/details/archboldspracti00prengoog.
- A Treatise on the Law and Practice of Bankruptcy: Under the Act of Congress of 1898 and Its Amendments. Kansas City: Vernon Law Book Company. 1922. ISBN 9781584776062. https://archive.org/details/atreatiseonlawa00blacgoog.
- The Bankrupt Laws, as Established by the New Act, 6 Geo. IV. C. 16.. London: Joseph Butterworth and Son. 1827.
- Lewis's Australian bankruptcy law (7th ed.). Law Book Company. 1978. ISBN 9780455196978.
- "Property divisible amongst creditors, and administration of property". The Principles of Bankruptcy. London: Stevens and Haynes. 1902. ISBN 9785875073076. https://archive.org/details/principlesbankr01britgoog.
- "Liquidation cases". Bankruptcy Litigation and Practice: A Practitioner's Guide. Aspen Publishers Online. 2007. ISBN 9780735561939.
- Australian Commercial Law (21st ed.). LBC Information Services. 1997. ISBN 9780455214665.
- Principles of International Insolvency. Sweet & Maxwell. 2007. ISBN 9781847032102.
- "Country Surveys". Comparative Consumer Insolvency Regimes: A Canadian Perspective. Hart Publishing. 2003. ISBN 9781841132723.
- "Property exempt from process". North Dakota Law Review 86. 2010.
Further reading
- Young's bankruptcy practice in Australia (3rd ed.). Butterworths. 1969. pp. 78–79.
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