Filing for Bankruptcy can be unsettling, especially if you’re worried about losing your assets. However, Canada’s bankruptcy exemptions provide a sense of security, allowing you to keep some of your assets. The federal government regulates a bankruptcy through the Bankruptcy and Insolvency Act, and the provinces and territories determine which assets you can keep.
Bankruptcy is a form of debt relief. It’s not intended to punish the debtor. One aim of the government’s approach is to prevent you from becoming destitute. You can also keep some assets that allow you to earn a living. Additionally, Bankruptcy exemptions include medical devices you need to maintain your health and are necessary. Each province has a list describing protected assets. The list details the maximum value of the assets you can keep.
Filing for Bankruptcy requires the expert guidance of a Licensed Insolvency Trustee. They will help you navigate the process. Part of this is making sure any assets that are not protected are assigned to the LIT. The LIT will sell them and distribute the proceeds from the sale to your creditors. Exempt assets will not be assigned to a LIT because they are yours to keep.
The Bankruptcy and Insolvency Act defines three types of exemptions:
1. Property you hold in trust for other persons.
2. GST credit payments and prescribed payments relating to your family’s needs.
3. Other exempt property as defined by the province or territory in which you live.
A protected asset is exempt from assignment to a LIT, which means you can keep it. However, it may have a maximum amount. If you own a vehicle and live in Nova Scotia, for example, you can keep your car if it has a value of $3,000 or less. If you need it for employment, the maximum value increases to $6,500. A vehicle with a higher value will not be exempt. This is because these rules are to protect only essential assets.
Bankruptcy exemptions
These are common assets that are exempt or partially exempt from Bankruptcy:
Investments
You may be able to keep some or all of your:
- Registered Retirement Savings Plans (RRSPs)
- Registered Disability Savings Plans (RDSPs)
- Registered Retirement Income Funds (RRIFs)
- Registered Education Savings Plans (RESPs)
- Deferred Profit Sharing Plans (DPSPs)
- Pensions
Depending on your province, these assets may be subject to clawbacks or, in some cases, not exempt, such as RESPs.
Your home
Your home equity may be exempt. You may keep your home if the amount of equity you have doesn’t exceed your province or territory’s maximum.
Your vehicle
You may be able to keep your vehicle. However, the value must be less than your province or territory’s maximum.
Wages and household income
A Bankruptcy will stop creditors from garnishing your wages. Your household is allowed to earn a maximum amount. If your household exceeds that amount, you must use some of the surplus to repay your creditors.
Tax refunds
If you receive a tax refund, your LIT will use it to repay your creditors.
Lottery winnings and inheritances
If you win the lottery or receive an inheritance before you are discharged from Bankruptcy but after filing, your LIT will distribute the money to repay your creditors. You keep any money not needed to settle your debts.
Additional assets
Each province and territory addresses additional assets such as tools, food, clothing, and furniture.
If you don’t want to lose any assets to Bankruptcy, remember you have options. You can discuss a Consumer Proposal with an LIT. A Consumer Proposal offers debt relief and does not require you to give up assets, giving you the power to manage your financial situation.
The list below outlines each province and territory’s Bankruptcy exemptions. A Licensed Insolvency Trustee has up-to-date information about exemptions for every province and territory in Canada and can advise you on how they apply to your situation.
Call us at 1-888-371-8900 or fill out our online form for a free consultation to discuss how Bankruptcy will affect your assets and explore other debt solutions.
Newfoundland & Labrador Bankruptcy Exemptions
In Newfoundland and Labrador, bankruptcy exemptions are set by the provincial government and applies to the equity in an asset. The Equity is the difference between the value of the asset and what you owe on the asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$4000 |
|
Motor Vehicle |
$2000 |
|
Food |
Amount required to feed debtor and dependents for 12 months |
|
Clothing |
$4000 |
|
Tools of Trade |
$10,000 |
|
Medical Aids |
No limit on medical aids required for debtor or dependents |
|
Registered Retirement Savings Plans: RRSP & RDSP’s |
Exempt |
Farming, Fishing / Land Exemptions:
|
Primary Occupation is Fishing, Farming or Aquaculture |
Exempt up to $10,000 |
Nova Scotia Bankruptcy Exemptions
In Nova Scotia, the Judicature Act of Nova Scotia, the Personal Property Security Act of Nova Scotia and the Insurance Act of Nova Scotia all contain exempt asset rules.
The following assets are protected or exempt assets in Nova Scotia. They are protected against the liquidation by creditors to satisfy unpaid debts: (unless a creditor holds a purchase money security interest).
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$5,000 |
|
Motor Vehicle |
$3,000 in one vehicle, or $6,500 if needed for employment |
|
Food |
No limit on necessary items |
|
Clothing |
No limit on necessary items |
|
Tools of Trade |
$7,500 |
|
Medical Aids |
No limit on medical aids required for debtor or dependents |
|
Pension plans, RRSP’s, RDSP’s, RRIF’s and Deferred profit sharing plans. |
Exempt – However, there is a claw back period of any contributions made to RRSP and RDSP in the 12 months prior to bankruptcy |
Exceptions to the Exemption(s)
|
Assets or Chattels used in debtor’s chief occupation |
Exempt status does not apply to assets or chattel subject to a purchase money security interest (PMSI). A PMSI is when a loan is given to facilitate the purchase of a specific asset, exempt or not. |
New Brunswick Bankruptcy Exemptions
The following assets are protected or exempt assets in New Brunswick. They are protected against the liquidation by creditors to satisfy unpaid debts: (unless a creditor holds a purchase money security interest)
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$5,000 |
|
Motor Vehicle |
$6,500 needed for employment or medical reasons |
|
Food & Fuel |
3 month supply of food & fuel for you and dependents |
|
Clothing |
No limit on necessary items |
|
Tools of Trade |
$6,500 |
|
Medical Aids |
No limit on necessary medical aids required for debtor or dependents |
|
Certain Pension plans, RRSP’s, RDSP’s and RRIF’s |
Exempt – However, there is a claw back period of any contributions made to RRSP and RDSP in the 12 months prior to bankruptcy |
Exceptions to the Exemption(s):
|
Assets or Chattels used in debtor’s chief occupation |
Exempt status does not apply to assets or chattel subject to a purchase money security interest (PMSI). A PMSI is when a loan is given to facilitate the purchase of a specific asset, exempt or not. |
Farming, Fishing / Land Exemptions:
|
Farm Property
|
Farm Planting 10 bushels of barley 10 bushels of buckwheat 10 bushels of wheat 35 barrels of potatoes
|
Prince Edward Island Bankruptcy Exemptions
The following assets are protected or exempt assets in Prince Edward Island. They are protected against the liquidation by creditors to satisfy unpaid debts (unless a creditor holds a purchase money security interest):
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$2,000 |
|
Motor Vehicle |
$3,000 on motor vehicle, or $6,500 if needed for employment |
|
Food |
No limit on necessary items |
|
Clothing |
No limit on necessary items |
|
Tools of Trade |
$2,000 |
|
Medical Aids |
No limit on necessary medical aids required for debtor or dependents |
|
Pension plans, RRSP’s, RDSP’s, and RRIF’s |
Exempt – However, RRSP’s have a condition they have a defined beneficiary as defined by provincial legislation. |
Exceptions to the Exemption(s)
|
Assets or Chattels used in debtor’s chief occupation |
Exempt status does not apply to assets or chattel subject to a purchase money security interest (PMSI). A PMSI is when a loan is given to facilitate the purchase of a specific asset, exempt or not. |
|
Spouse, former spouse, or child |
Provincial exemptions do not apply against spouse or child with respect to maintenance orders, except in the case of tools of trade |
Farming, Fishing / Land Exemptions:
|
Farming Equipment & Property
|
Farmers are allowed the necessary seed to cultivate land under his control, not exceeding 100 acres |
Quebec Bankruptcy Exemptions
In Quebec, property exempt from seizure in bankruptcy is set by the provincial government and applies to the equity in an asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$6,000 |
|
Motor Vehicle |
Allowed 1 vehicle required for work |
|
Food |
No limit on necessary items |
|
Clothing |
No limit on necessary items |
|
Tools of Trade |
Tools required for debtors work |
|
Medical Aids |
No limit on necessary medical aids required for debtor or dependents |
|
RRSP’s, RDSP’s |
Exempt – However, there is a claw back period of any contributions made to RRSP and RDSP in the 12 months prior to bankruptcy |
Ontario Bankruptcy Exemptions
In Ontario, the Execution Act sets out what assets are protected against the liquidation by creditors to satisfy unpaid debt (unless a creditor holds a purchase money security interest).
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$14,180 |
|
Motor Vehicle |
$7,117 |
|
Food |
No limit on necessary items |
|
Clothing |
No limit on necessary items |
|
Tools of Trade |
$14,405 |
|
Medical Aids |
No limit on necessary medical aids required for debtor or dependents |
|
Pension plans, RRSP’s, RRIF’s, and RDSP’s |
Exempt – However, RRSP’s have a condition they have a defined beneficiary as defined by provincial legislation. |
|
Equity in Home (Primary Residence) |
$10,783, if a debtor’s equity in the house is less than $10,783. |
Farming, Fishing / Land Exemptions:
|
(Farming Only) Tools and Livestock
|
31,379 for livestock, fowl, bees, books, tools and implements of the trade |
Manitoba Bankruptcy Exemptions
In Manitoba, property exempt from seizure in bankruptcy is set by the provincial government and applies to the equity in an asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$4,500 |
|
Motor Vehicle |
$3,000 |
|
Food |
No limit on necessary items for 6 months |
|
Clothing |
No limit on necessary items |
|
Articles and furniture necessary for Religious Services |
Exempt |
|
Tools of Trade |
$7,500 |
|
Medical Aids |
No limit on necessary medical aids required for debtor or dependents |
|
Equity in Home (Primary Residence) |
$2,500 if you are the sole owner |
Farming, Fishing / Land Exemptions:
|
Farming Equipment & Property
|
– All Farm equipment and animals needed for the next 12 months – One motor vehicle if required for you agricultural operations – Sufficient Seed to seed all land under cultivation – Up to 160 acres of farmland – Any house, stable, barn and fences on your farm (up to 160 acres) |
Saskatchewan Bankruptcy Exemptions
In Saskatchewan, property exempt from seizure in bankruptcy is set by the provincial government and applies to the equity in an asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
Exempt – All necessary household furniture & appliances |
|
Motor Vehicle |
$10,000 |
|
Food |
No limit on necessary items for 6 months |
|
Clothing & jewelry |
$7,500 |
|
RRSP, RDSP, RRIF’s, certain pensions (DPSP) and life insurance policies |
Exempt with some restrictions. |
|
Tools of Trade |
All Tools required for debtors work |
|
Medical Aids |
No limit on necessary medical aids required for debtor or dependents |
|
Equity in Home (Primary Residence) |
$50,000 |
Farming, Fishing / Land Exemptions:
|
Farming Equipment & Property
|
– Enough cash or crops to provide food & fuel to farmer until next harvest period. – All Livestock & arm machinery , including car or truck, for up to 12 months of operation. – Two bushels of seed per acre of land – Tools of Trade necessary for farming up to $20,000 |
Alberta Bankruptcy Exemptions
In Alberta, the Civil Enforcement Act sets out what assets are protected against the liquidation by creditors to satisfy unpaid debt (unless a creditor holds a purchase money security interest).
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$4,000 |
|
Motor Vehicle |
$5,000 |
|
Food & Fuel |
Amount required to feed debtor and dependents for 12 months |
|
Clothing |
Up to $4000 |
|
Tools of Trade |
$10,000 |
|
Medical Aids |
Medical aids required for debtor or dependents |
|
RRSPs, RIFs, RESPs, RDSP’s and certain life insurance policies |
Exempt (with some restrictions). |
|
Equity in Primary Residence |
$40 000 for the property but subject to conditions. Contact your LIT for more information |
Farming, Fishing / Land Exemptions:
|
(Farmer’s Only) Land |
160 acres of land; if principal residence is located on that land and is part of your farming operation |
|
(Farmer’s Only) Personal Property |
Any property that is required in order to sustain up to 12 months of farming operations |
British Columbia Bankruptcy Exemptions
In British Columbia, the Court Order Enforcement Act and Insurance Act both set out what assets are protected against the liquidation by creditors to satisfy unpaid debt (unless a creditor holds a purchase money security interest).
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$4000 |
|
Motor Vehicle |
$5000, unless debtor owes for family or child support payments, in which case their exemption is reduced to $2,000 |
|
Food |
No limit on necessary items for debtor and dependents. |
|
Clothing |
No limit on necessary items for debtor and dependents. |
|
Tools of Trade |
$10,000 (Cannot be applied to a work vehicle) |
|
Medical & Dental Aids |
Medical aids required for debtor or dependents |
|
RRSPs and RDSPs |
Exempt, except for RRSP contributions made in 12 months before bankruptcy |
|
Equity in Primary Residence |
$12,000 if located in Capital Region or Metro Vancouver Region District (see below) |
** Capital Region or Metro Vancouver Regional District includes: **
Vancouver, Surrey, Burnaby, Richmond, Coquitlam, Langley, Delta, North Vancouver, Maple Ridge, New Westminster, Port Coquitlam, West Vancouver, Port Moody, Langley, White Rock, Pitt Meadows, Bowen Island, Anmore, Lions Bay, Tsawwassen, Belcarra, Saanich, Central Saanich, North Saanich, Victoria, Langford, Oak Bay, Esquimalt, Colwood, Sooke, Sidney, View Royal, Metchosin, Salt Spring Island, Juan De Fuca, Southern Gulf Islands
Yukon Bankruptcy Exemptions
In the Yukon, property exempt from seizure in a bankruptcy is set by the territorial government and applies to the equity in an asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Furniture, Household Appliances |
Up to $200 |
|
Equity in Home (primary residence) |
$3,000 |
|
Food |
No limit on necessary items for 12 months |
|
Clothing |
No limit on necessary items for debtor and dependents |
|
Tools of Trade – Livestock, fowl, bees, books used for business |
$600 |
North West Territories Bankruptcy Exemptions
In the NWT, property exempt from seizure in bankruptcy is set out in the Exemptions Act and applies to the equity in an asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Unsecured Furniture, Household Appliances |
$5,000 |
|
Motor Vehicle |
$6,000 |
|
Food & Fuel |
No limit on necessary items for 12 months |
|
Clothing |
No limit on necessary clothing |
|
Hunting Tools |
$15,000 |
|
Tools of Trade |
$12,000 |
|
Equity in Home (Primary Residence) |
$50,000 |
Nunavut Bankruptcy Exemptions
In Nunavut, property exempt from seizure in a bankruptcy is set by the territorial government and applies to the equity in an asset.
|
Category |
Maximum Amount of Exemption (Realizable value) |
|
Furniture, Household Appliances |
No limit |
|
Medical & Dental Aids |
No limit |
|
Food & Fuel |
No limit on necessary items for 12 months |
|
Clothing |
No limit on necessary clothing |
|
Hunting Tools / Tools of Trade |
No limit |
|
Certain Pensions & Life insurance policies |
Most Exempt. |
|
Equity in Home (Primary Residence) |
$35,000 |
