I Have Furniture of Sentimental Value – Will I Lose It in Bankruptcy?

December 11th, 2015 by Wendy O.

Loosing or keeping furniture in a bankruptcy?

Loosing or keeping furniture in a bankruptcy?Nan and Richard had to tighten their budget after Richard lost his job in management. He’d been searching for a few months for a new position, but interviews had gotten him nowhere. Nan still had her job, but their income had taken a hit.

A reduced budget was not the greatest of their concerns, however. The more pressing matter was how long they would be able to meet their financial obligations. Things might have worked out if they had not owed a substantial amount to their credit cards – but, like many Canadians, their credit card bills were on the high side – and they both had a number of maxed-out accounts.

Nan secretly feared that they might not be able to pay all their bills in the coming months – could it be true that they might even have to file for Bankruptcy? She knew that would be embarrassing, but another thing worried her even more – the antique horsehair couch and a few old dolls she had inherited from her grandmother several years ago.

These items were precious to Nan. She remembered bouncing on the couch as a child, and playing with the dolls while her Grandma babysat her.

Is furniture seized in a Bankruptcy?

If she and Richard had to file for Bankruptcy, would these items be seized? Nan was horrified at what her family would think!

Fortunately, Nan needn’t have worried about the furniture and dolls.

If a person files for Bankruptcy, the Trustee does NOT send a crew to empty their house. The debtor is actually allowed to keep certain essentials and assets, according to rules that vary by province. He or she also retains items that are of no ultimate monetary value (bearing the cost of sale in mind).

Nan’s heirlooms fell into that category, their value being primarily sentimental. If she and Richard filed for Bankrupcy, she would not have to give them up.

In a Bankruptcy, the Trustee does distribute most of your assets to your creditors, except for certain provincial exemptions. It is essential that you consult a Trustee to learn what your provincial exemptions are, as the rules are complex and subject to change.

But in general, these exemptions often include limited amounts of:

  • Food and heating fuel
  • Health aids
  • Furniture
  • Clothing
  • Your car (up to provincial limit)
  • Your house (up to provincial limit)
  • The tools of your trade
  • Farm animals, equipment, and supplies
  • Pensions and retirement savings

Bankruptcy is meant to give debtors a fresh start – and you won’t be expected to start over with nothing.

But Nan and Richard didn’t know these things yet! Luckily, they confided their financial worries to a friend who, it turned out, had experienced a similar situation in the recent past. He recommended his Trustee, and Nan and Richard, still feeling very anxious, booked a free appointment.

The Trustee asked about how their situation had happened, and told them roughly what they would be able to keep if they filed for Bankruptcy.

And with that, many of their worries disappeared!

They and the Trustee also explored the possibility of filing a Consumer Proposal instead, which would allow them to keep more of their assets. After another appointment to work out the specific numbers, they and the Trustee were able to chart a course ahead.

If you are experiencing similar concerns, the best remedy is information. Minimize your worry by booking a free appointment with a Trustee, and learn what your options are. Most people, like Nan and Richard, leave that appointment feeling much better about their future.

Wendy O.

My name is Wendy and I finished my consumer proposal in 2013. My goal is to help provide hope to Canadians in debt by sharing my experience, and advice as a consumer – and also to help eliminate the stigma and embarrassment surrounding people who file a consumer proposal or bankruptcy.

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