What Assets Are Exempt From Bankruptcy?

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You can keep some of your possessions when you file for bankruptcy. These assets are called bankruptcy exemptions because they are exempt from seizure.

When it comes to bankruptcy and assets, why are some assets exempt?

Bankruptcy allows an honest, but unfortunate debtor to get a fresh financial start. When you file for bankruptcy, you surrender most of your assets to your Licensed Insolvency Trustee. The Trustee then turns those assets into cash (liquidates them) and distributes the money to your creditors.

However, to achieve a new start you need to keep some essential property. These essential assets are your bankruptcy exemptions, and are defined in the law.

Bankruptcy and Assets: Which Are Exempt?

Every province and territory in Canada has its own list of exemptions, designed to leave you with enough resources to make a fresh financial start.

In Canada, the federal Bankruptcy and Insolvency Act defines three kinds of exemptions:

  • Property you hold in trust for other persons.
  • GST credit payments and prescribed payments relating to your family’s essential needs.
  • Other exempt property defined by the province or territory in which you live.

What are your likely exemptions? What can you keep in a bankruptcy? A Licensed Insolvency Trustee has up-to-date information on exemptions for every province and can advise you on how these apply to your situation. Your first consultation is free and confidential – contact a Trustee today!

The provinces and territories generally define “other exempt property” as including some or all of the following categories, up to limited values that vary greatly from province to province:

  • Food and heating fuel needed by you and your dependants
  • Clothing needed by you and your dependants
  • Household furnishings and appliances
  • One motor vehicle (sometimes only if needed to earn your living)
  • Health (medical, dental, etc.) aids needed by you and your dependants
  • The tools of your trade: tools, equipment, and books needed to earn money from your non-farming occupation
  • Farm property: farmland where your principal residence is located, plus required operating equipment, livestock, and other property
  • Your principal residence (house or mobile home)
  • Some land
  • Sentimental items, including pets
  • Pensions or retirement savings
  • Miscellaneous categories in some provinces

The tools exemption and the farm exemption (if applicable) cannot both be taken; you may claim one category only, which applies to your principal occupation.

Will I lose my house if I file for bankruptcy?

This depends on several factors, and is best answered by a Licensed Insolvency Trustee. In most provinces, your home is one of the assets subject to liquidation in a bankruptcy. However, certain provinces exempt some or all of the value of a principal residence.

If your home is mortgaged, only the equity is subject to seizure. In the event you are able to retain your home, a Trustee can help you decide if keeping your home is the most prudent financial strategy.

See also: What Happens to My House After Filing Bankruptcy?

Can you keep your car if you file for bankruptcy? 

Most provincial regulations include an exemption for some or all of the value of your car, especially if it is needed for your occupation. If you are making payments on your car, retaining the car will depend partly on whether you can continue the payments. A Licensed Insolvency Trustee can explain how the regulations will apply to your specific situation.

Provincial exemptions for homes and cars can be confusing, especially when considering mortgages and leases. A Licensed Insolvency Trustee will gladly help you learn how these assets would be affected in a bankruptcy. Your conversation is confidential and you are under no obligation. Contact a Trustee today!

Bankruptcy Exemptions by Province and Territory

CAUTIONS:

  •     The exemption lists we provide below are simplified summaries of the law
  •     Even where there is no dollar limit, exemptions are limited to what you and your dependants really need
  •     The provinces often adjust the exemptions for various reasons, such as inflation

For interpretation of the rules in your case, we strongly recommend that you contact a Licensed Insolvency Trustee to review your situation and determine which of your assets will be exempt if you file for bankruptcy. You should be completely clear on what you can keep if you go bankrupt in Canada, versus what you may lose.

Please choose your province or territory:

Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland & Labrador
Northwest Territories
Nova Scotia
Nunavut
Ontario
Prince Edward Island
Quebec
Saskatchewan
Yukon

Alberta – Exempt Property

  1. Food: 12 months’ supply
  2. Clothing: up to $4,000
  3. Household furniture and appliances: up to $4,000
  4. One motor vehicle; up to $5,000
  5. Health aids: no dollar limit
  6. Tools of your trade: up to $10,000
  7. Farm property: requirements for 12 months’ operations
  8. Principal residence: up to $40,000, reduced to your share if you are a co-owner
  9. Farmland: up to 160 acres if principal residence is on same land
  10. Social allowance, handicap benefit or a widow’s pension if the proceeds from the payment are not intermingled with your other funds
  11. RRSPs, RRIFs, DPSPs and registered education savings plans, but not payments out of these plans, subject to certain conditions
       

Statute: Read Alberta’s Civil Enforcement Act and Civil Enforcement Regulation.

For details on what you can keep if you go bankrupt in Alberta and the rules for bankruptcy exemptions in that province, please consult a Licensed Insolvency Trustee in Alberta.

British Columbia – Exempt Property

  1. Food and fuel: no exemption
  2. Necessary clothing: no dollar limit
  3. Household goods: up to $4,000
  4. One motor vehicle: up to $5,000 (or $2,000 if you are late in making support payments)
  5. Medical and dental aids: no dollar limit
  6. Tools of your trade: up to $10,000     Principal residence: up to $9,000 (or $12,000 in Greater Vancouver or Victoria)
  7. RRSPs, RRIFs, DPSPs

Statute: Read British Columbia’s Court Order Enforcement Act and Exemption Regulation.

For details on what you can keep if you go bankrupt in British Columbia and the rules in that province for bankruptcy exemptions, please consult a Licensed Insolvency Trustee in British Columbia.

Manitoba – Exempt Property

  1. Food and fuel: six months’ supply or cash equivalent
  2. Necessary clothing: no dollar limit
  3. Household furniture and appliances: up to $4,500
  4. One motor vehicle (needed for occupation): non-farmers up to $3,000, farmers no limit
  5. Health aids: no dollar limit
  6. Tools of your trade: up to $7,500
  7. Farm property: buildings and requirements for 12 months’ operations
  8. Farm animals necessary for 12 months’ operations
  9. Seed sufficient to seed all farmland under cultivation
  10. Principal residence: if farmhouse, no limit; non-farmers up to $2,500, or $1,500 if you are a co-owner
  11. Farmland: up to 160 acres
  12. Items needed for religious services
  13. Municipal or school property

Statutes: Read the Executions Act and the Judgments Act.

For details on what you can keep if you go bankrupt in Manitoba and the rules for bankruptcy exemptions in that province, please consult a Licensed Insolvency Trustee in Manitoba.

Contact a Licensed Insolvency Trustee to better understand bankruptcy exemptions. The Trustee can also tell you about alternatives to bankruptcy, such as consumer proposal, in which property is not seized. Your first consultation is free and confidential – contact a Trustee today!

New Brunswick – Exempt Property

  1. Food and fuel: three months’ supply
  2. Necessary clothing: no dollar limit
  3. Household furniture and appliances: up to $5,000 (more in some cases)
  4. One motor vehicle (needed for occupation): up to $6,500 (more in some cases)
  5. Health aids: no dollar limit
  6. Tools of your trade: up to $6,500
  7. Farm property: farm animals to specified limits, their feed for six months, and seed grain and potatoes to specified limits
  8. Principal residence: no exemption
  9. Consumer goods which are necessary to the debtor and/or have little realizable value: no dollar limit
  10. Pets   

Statute: Read the Memorials and Executions Act and the Personal Property Security Act.

For details on what you can keep if you go bankrupt in New Brunswick and the rules for bankruptcy exemptions in that province, please consult a Licensed Insolvency Trustee in New Brunswick.

Newfoundland & Labrador – Exempt Property

  1. Food and fuel: twelve months’ supply
  2. Necessary clothing: up to $4,000
  3. Household furniture and appliances: specific types, up to $4,000
  4. One motor vehicle: up to $2,000
  5. Medical and dental aids: No dollar limit
  6. Tools of your trade: up to $10,000
  7. Personal property for income earning incl. farming, fishing or aquaculture property: up to $10,000
  8. Principal residence: up to $10,000
  9. Pets
  10. Items of sentimental value: up to $500
  11. Certain pension plans
  12. Certain income

Statute: Read the Judgment Enforcement Act and its Regulations, and the Personal Property Security Act.

For details on what you can keep if you go bankrupt in Newfoundland & Labrador and the rules for bankruptcy exemptions in that province, please consult a Licensed Insolvency Trustee in Newfoundland & Labrador.

Nova Scotia – Exempt Property

  1. Food and fuel: no dollar limit
  2. Necessary clothing: no dollar limit
  3. Consumer goods necessary to the debtor, and/or of little realizable value: no dollar limit
  4. Household goods: $1,000, or up to $6,500 in some cases
  5. One motor vehicle: up to $3,000, or up to $6,500 if needed in occupation
  6. Health aids: no dollar limit
  7. Tools of any occupation: up to $1,000
  8. Seeds and livestock for domestic use: no dollar limit
  9. Farm equipment to a certain value
  10. Principal residence: no exemption

Statute: Read the Judicature Act, the Value of Chattels Regulation and the Personal Property Security Act (PDF).

For details on what you can keep if you go bankrupt in Nova Scotia and the rules for bankruptcy exemptions in that province, please consult a Licensed Insolvency Trustee in Nova Scotia.

Ontario – Exempt Property

  1. Food, fuel, household furniture, appliances: up to $13,150
  2. Necessary clothing: up to $5,650
  3. One motor vehicle (needed for occupation): up to $6,600
  4. Medical devices: no dollar limit
  5. Tools of your trade: up to $11,300; or, for full-time farmers: livestock, bees, books, tools and implements up to $29,100
  6. Principal residence: $10,000 equity is exempt

Statute: Read Ontario’s Execution Act and its Regulations.

Exemption amounts for Ontario bankruptcy are reviewed at regular intervals. Regulations are updated every five years. We strongly recommend that you contact a Licensed Insolvency Trustee in Ontario to review your personal situation and determine what you can keep if you file for bankruptcy in Ontario.

Exemptions can be confusing, and statutes are updated and revised regularly. A Licensed Insolvency Trustee has current information and can advise on your best course of action. There is no obligation when you have your first conversation with a Trustee, and your discussion is confidential. Contact a Trustee today!

Prince Edward Island – Exempt Property

  1. Food, fuel, household furniture, appliances: up to $2,000
  2. Necessary clothing: no dollar limit
  3. One motor vehicle: $3,000
  4. Tools of your trade: up to $2,000
  5. Farm property: seed for up to 100 acres, other farm chattels and equipment up to $5,000
  6. Principal residence: no exemption   

If you are behind on child or spousal support payments, the above exemptions do not apply to any item but tools of your trade.

Statute: Read Ontario’s Judgment and Execution Act and the Personal Property Security Act.

Quebec – Exempt Property

  1. “Moveable property” and household furnishings, up to $6,000
  2. Food, fuel, linens and clothing: no dollar limit
  3. Motor vehicle: no dollar limit
  4. Disability aids, accident benefits: no dollar limit
  5. Tools of your trade: no dollar limit
  6. Principal residence: $10,000
  7. Support received through court order, donation, or bequest
  8. Most property declared exempt by a donor or will
  9. A certain portion of your wages and salaries, based on number of dependants
  10. Benefits payable and employer contributions under employer-sponsored pension plan
  11. Family papers and portraits, medals and other decorations, documents
  12. Items used in religious worship
  13. Income for services as a minister of religion
  14. Food, lodging, and transportation passes received for employment travel

Statute: Read Quebec’s Code of Civil Procedure.

For details on what you can keep if you go bankrupt in Quebec and the rules for bankruptcy exemptions in that province, please consult a Quebec Licensed Insolvency Trustee.

Saskatchewan – Exempt Property

  1. Food and fuel: supply until the next harvest or cash equivalent
  2. Clothing including jewellery: $7,500
  3. Household furniture and appliances: up to $4,500 (or $10,000 for a farm)
  4. One motor vehicle valued at up to $10,000
  5. Medical and dental aids: no dollar limit
  6. Tools of your trade: up to $4,500
  7. Farm property: among other exemptions, livestock and equipment for up to 12 months, two bushels seed per acre of land under cultivation, and enough cash or current crop for farming costs to the next harvest
  8. Principal residence: up to $50,000 (your share)
  9. Pets valued at up to $2,000  

Statute: Read The Enforcement of Money Judgments ActThe Enforcement of Money Judgments Regulations and the Saskatchewan Farm Security Act (PDF).

For details on what you can keep if you go bankrupt in Saskatchewan and the rules for bankruptcy exemptions in that province, please consult a Licensed Insolvency Trustee in Saskatchewan.

Northwest Territories / Nunavut / Yukon – Exempt Property

  1. Food and fuel: twelve months’ supply 
  2. Necessary clothing: no dollar limit  
  3. Household furniture and appliances: no dollar limit 
  4. Medical and dental aids: no dollar limit in Nunavut and Northwest Territories
  5. Tools and animals of your trade (or, in Nunavut, for hunting/fishing for food): up to  prescribed limits in Nunavut and Northwest Territories; up to $600 in Yukon
  6. Principal residence
  7. One motor vehicle in Nunavut and Northwest Territories

 The above exemptions for the territories do not apply if:

  • You are behind on child or spousal support payments.
  • You have absconded or are about to abscond from the territories, leaving no spouse or family behind.

Statute: Read the Yukon Exemptions Act (PDF), NWT Exemptions Act (PDF), and Nunavut Consolidation of Exemptions Act (PDF).

A Licensed Insolvency Trustees is your trusted resource for current information on insolvency solutions, and factors that may affect your specific situation. Contact a Licensed Trustee today. Your first appointment is free, and your discussion is confidential.

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