The Supreme Court of Canada today ruled in favour of discharging 407 debts in a Consumer Proposal or bankruptcy. This marks a long battle to relieve honest but unfortunate debtors of having to pay back their 407 Debt even if they filed for bankruptcy or filed a consumer proposal.

This decision is significant as now all debtors with outstanding 407 debts whom have filed or intend on filing a bankruptcy or consumer proposal can rest easy knowing that this debt won’t hang over their head forever.

What the 407 was doing in practice was denying License Plate Renewals to any individual with 407 debt until that debt was paid off in full, regardless if they filed for bankruptcy or a consumer proposal. 407 Debt is not listed as a non-dischargeable debt under the Bankruptcy and Insolvency Act. For most drivers in Ontario, myself included, our 407 tolls never grew too large. For some though that were using it daily for commutes to work, these tolls could grow into the hundreds and into the thousands.

For a majority of us when we incur debt we have every intention to pay off that debt. Sometimes life delivers us unanticipated events which can have a huge impact on us financially. When these events occur, sometimes bankruptcy or a consumer proposal is the only option to get out of the financial hardship. By the 407 refusing license plate renewals until the debt was paid in full they were refusing the financial relief these debtors needed in this challenging financial time in life as well as potentially preventing debtors from continuing to earn a living if their job is dependent on having a valid driver’s license.

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