The tools of trade are items that are exempt from
attachment under
bankruptcy law
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...
or from seizure.
The exemption exists in many jurisdictions. For examples:
* In England, the
Bankrupts (England) Act 1825 (
6 Geo. 4. c. 16) included it in a short list of exemptions: "tools of trade, necessary household furniture, and the wearing apparel of himself, his wife and children". The
Bankruptcy Act 1883 and the
Bankruptcy Act 1890 contained the same exception. The
Bankruptcy Act 1914 contained an exception. The
Insolvency Act 1986
The Insolvency Act 1986 (c. 45) is an act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK.
History
The Insolvency Act 1986 followed the publication ...
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".
* In Australia the
Bankruptcy Act 1966 exempts the "ordinary tools of trade, plant and equipment
..ordinary professional instruments and professional reference books".
* All of the provinces of Canada have a tools of trade exemption in their various bankruptcy laws.
* In the United States, the Bankruptcy Code (USC 2) ยง522(f) exempts implements, professional books, and tools of the trade.
All of these owe this exemption to the provisions for bankrupts that existed in
English common law
English law is the common law legal system of England and Wales, comprising mainly criminal law and civil law, each branch having its own courts and procedures. The judiciary is independent, and legal principles like fairness, equality bef ...
before it was codified by statute.
What exactly constitute one's tools of trade comes down to case law, and the case law of the United States exemplifies how complex such case law often is.
Farmers have claimed mechanical cream separators.
A professional forest guide claimed his canoe as exempt, but was not allowed to claim his rifle.
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.
Breeding stock can be considered, as well as a logging truck and trailer.
However, some cases have limited the exemption to personal hand tools and not large machinery or power tools.
England and Wales
Under the
Courts Act 2003
The Courts Act 2003 (c.39) is an Act of the Parliament of the United Kingdom implementing many of the recommendations in Sir Robin Auld's (a Court of Appeal judgeReview of the Criminal Courtsin England and Wales (also known as the "Auld Revie ...
, "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
A writ of execution (also known as an execution) is a court order granted to put in force a judgment of possession obtained by a plaintiff from a court. When issuing a writ of execution, a court typically will order a sheriff or other similar of ...
issued from the High Court. Under the
Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 (c. 29) (POCA) is an act of the Parliament of the United Kingdom which provides for the confiscation or civil recovery of the proceeds from crime and contains the principal money laundering legislation in the ...
, "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.
[The Proceeds of Crime Act 2002, section 47C(2)(b) and (4)(a)]
References
What supports what
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See also
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Attachment (law) Attachment is a legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor. A wide variety of legal mechanisms are ...
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Bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...
Further reading
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Bankruptcy
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