What are bankruptcy exemptions?

Bankruptcy is best suited to those in a perilous financial situation and unable to pay their debts.

You pay what you can afford until the bankruptcy is over and surrender some assets to your Licensed Insolvency Trustee, who will turn those assets into cash for your creditors.

When faced with this situation, the last thing you need is to lose everything you own when things aren’t going well and you’re feeling low.

To ensure you are not left destitute, some assets are exempt from bankruptcy in Canada.

To put it simply, this is a list of possessions and assets that you can keep if you file for bankruptcy in Canada, meaning these assets are exempt from seizure in bankruptcy.

This guide will show you what bankruptcy exemptions apply to you based on the rules in your province or territory.

What assets are exempt in bankruptcy?

Common exempt assets include things like household furnishings, clothing, food, heating, work tools and a vehicle up to a certain value. There are also exemptions for keeping some home equity.

RRSPs are also protected except for contributions made in the last twelve months.

It is important to note that any income received from exempt assets is considered when checking whether you have surplus income.

Read on to discover the exemptions for your province or territory. Alternatively, connect with a Licensed Insolvency Trustee.

Bankruptcy exemptions by province and territory

When you file for bankruptcy, what you can keep depends on where you live in Canada:

Alberta bankruptcy exemptions

As outlined in Alberta’s Civil Enforcement Act, here are the bankruptcy exemptions for Alberta:

  • Food (you and your dependents) for the next 12 months.
  • Clothing (you and your dependents) up to a value of $4,000.
  • Household furnishings and appliances up to a value of $4,000.
  • One motor vehicle, not exceeding $5,000.
  • All medical and dental aids (you and your dependents).
  • Equity in your principal residence up to $40,000. (If co-owned, the amount is reduced to the percentage you own.)
  • Up to 160 acres of land if your principal residence is located on that land. The land must be part of your farm.
  • The personal property needed for farming operations over the next 12 months.
  • Tools for your trade (tools, operating equipment and resources needed to make money) up to $10,000.
  • Social allowance, handicap benefit or a widow’s pension if the proceeds are separate from your other funds.
  • RRSPs (except contributions in the last 12 months), RESPs, RRIFs and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

See also: Alberta debt collection laws

British Columbia bankruptcy exemptions

As outlined in British Columbia’s Court Order Enforcement Act, here are the bankruptcy exemptions for British Columbia:

  • All clothing (you and your dependents).
  • Household furnishings and appliances up to a value of $4,000.
  • One motor vehicle, not exceeding $5,000. If you owe child care payments, it is reduced to $2,000.
  • All medical and dental aids (you and your dependents).
  • Greater Vancouver and the Victoria capital area: Equity in your principal residence up to $12,000.
  • Elsewhere in the province: Equity in your principal residence up to $9,000.
  • Tools for your trade (tools, operating equipment and resources needed to make money) up to $10,000.
  • RRSPs (except contributions in the last 12 months) and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

See also: BC debt collection laws

Manitoba bankruptcy exemptions

As outlined in The Executions Act and The Judgments Act, here are the bankruptcy exemptions for Manitoba:

  • Food and fuel for you and your dependents for the next 6 months (or cash equivalent).
  • Clothing for you and your dependents.
  • Household furnishings and appliances up to a value of $4,500.
  • Articles and furniture needed for the performance of religious services.
  • One motor vehicle, if needed for work or transportation for work, not exceeding $3,000.
  • All health aids (you and your dependents).
  • Equity in your principal residence up to $2,500. (If co-owned, the amount is reduced to $1,500.)
  • Tools for your trade (tools, operating equipment, professional books and other resources needed to make money) up to $7,500.
  • Seed sufficient to seed all the land under cultivation.
  • The chattel property of any municipality, local government district, school district, school division or school area.
  • RRSPs (except contributions in the last 12 months), RRIFs, DPSPs and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

Farmers:

  • All animals necessary for operations for the next 12 months.
  • All farm machinery, dairy utensils and farm equipment necessary for operations for the next 12 months.
  • One motor vehicle, if required for operations.
  • Farmland, not more than 160 acres.
  • The house, stables, barns, and fences on your farm.

See also: Manitoba debt collection laws

Newfoundland and Labrador bankruptcy exemptions

As outlined in the Judgment Enforcement Act, Judgement Enforcement Regulations and the Personal Property Security Act, here are the bankruptcy exemptions for Newfoundland and Labrador:

  • Food (you and your dependents) for the next 12 months.
  • Fuel or heating needed for you and your dependents.
  • Clothing (you and your dependents) up to a value of $4,000.
  • Household furnishings and appliances up to a value of $4,000.
  • One motor vehicle up to a value of $2,000.
  • All medical and dental aids (you and your dependents).
  • Equity in your principal residence up to $10,000.
  • Tools for your trade or business (tools, operating equipment and resources needed to make money) up to $10,000.
  • Items of sentimental value up to $500.
  • All pets.
  • RRSPs (except contributions in the last 12 months), RRIFs, DPSPs and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

Farming, fishing and aquaculture:

  • If your primary occupation is farming, the personal property needed to earn income up to a value of $10,000.
  • If your primary occupation is fishing, the personal property needed to earn income up to a value of $10,000.
  • If your primary occupation is aquaculture, the personal property needed to earn income up to a value of $10,000.

Nova Scotia bankruptcy exemptions

As detailed in Nova Scotia’s Judicature Act and the Personal Property Security Act, here are the bankruptcy exemptions for Nova Scotia:

  • Food and fuel for you and your family.
  • Clothing for you and your family.
  • Furniture, household furnishings and appliances up to $5,000.
  • All grain and other seeds, and all cattle, hogs, fowl, sheep and other livestock for domestic use of you and your family.
  • One motor vehicle, not exceeding $6,500 if the motor vehicle is required for employment, trade, profession or occupation or for transportation to a place of employment where public transportation facilities are not reasonably available.
  • All medical and health aids for you and your family.
  • Farm equipment, fishing nets, tools and implements used in your chief occupation, up to $7,500.
  • RRSPs (except contributions in the last 12 months), RESPs, RRIFs and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

Nunavut bankruptcy exemptions

The bankruptcy exemptions for Nunavut are set by the territorial government:

  • Household furniture, utensils, and equipment (no limit).
  • Clothing for you and your family (no limit).
  • Food and fuel that you require for the next 12 months.
  • Equity in your home up to $35,000.
  • All medical and health aids for you and your family.
  • Hunting tools and tools of the trade.
  • RRSPs (except contributions in the last 12 months) and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

New Brunswick bankruptcy exemptions

Below are the bankruptcy exemptions in New Brunswick.

These exemptions are outlined in New Brunswick’s The Enforcement of Money Judgments Act and its companion, An Act Respecting the Enforcement of Money Judgments Act.

  • Food, clothing and fuel necessary for you and your dependents for 3 months.
  • Household furnishings and appliances up to a value of $5,000 (in some cases more).
  • One motor vehicle, not exceeding $6,500 if required for employment, to retain employment, for your trade, profession or occupation, or transportation to the place of employment where public transport is not reasonably available.
  • All medical and health aids (you and your dependents).
  • Tools for your trade (tools, operating equipment and resources needed for your trade or profession) up to $6,500.
  • RRSPs (except contributions in the last 12 months), RDSPs, RRIFs and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)
  • Your pets.

Farming exemptions:

  • Two horses and sets of harness, two cows, ten sheep, two hogs and twenty fowl, and food for six months.
  • Necessary seed grain and potatoes required for planting purposes: forty bushels of oats, ten bushels of barley, ten bushels of buckwheat, ten bushels of wheat and thirty-five barrels of potatoes.

See also: New Brunswick debt collection laws

Northwest Territories bankruptcy exemptions

Here are the bankruptcy exemptions in the Northwest Territories. The territorial government sets exemptions as set out in the Exemptions Act and the Exemptions Regulations.

  • Household furniture and appliances up to $5,000.
  • Clothing for you and your family (no limit).
  • Food and fuel that you require for the next 12 months.
  • One motor vehicle, not exceeding $6,000.
  • Equity in your home up to $50,000.
  • All medical and health aids for you and your family.
  • Hunting tools up to $15,000.
  • Tools of the trade up to $12,000.
  • RRSPs (except contributions in the last 12 months) and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

Ontario bankruptcy exemptions

Here are the bankruptcy exemptions in Ontario. These exemptions are outlined in Ontario’s Execution Act.

  • Clothing for you and your dependents with no limit.
  • Household furnishings and appliances up to a value of $14,180.
  • One motor vehicle up to a value of $7,117.
  • All medical and dental aids (you and your dependents).
  • Equity in your principal residence less than $10,783.
  • Tools for your trade (tools, operating equipment and resources needed for your trade or occupation) up to $14,405.
  • RRSPs and RRIFs (except contributions in the last 12 months) and pension plans.
  • Life insurance policies if the beneficiary is spouse, child, grandchild or parent of the policy owner.

Farmers:

  • Livestock, fowl, bees, books, tools and implements of the trade up to $31,379.

See also: Ontario debt collection laws

Prince Edward Island bankruptcy exemptions

As written in Prince Edward Island’s Judgment and Execution Act, here are the bankruptcy exemptions in Prince Edward Island:

  • Necessary food, clothing and fuel for you and your family.
  • Household furniture, utensils, equipment, food and fuel up to $5,000.
  • One motor vehicle, not exceeding $6,500 in value.
  • Tools for your trade (tools, operating equipment and resources needed to make money) up to $2,000.
  • All medical and health aids for you and your family.
  • RRSPs (except contributions in the last 12 months), RRIFs and pension plans.
  • Life insurance policies if the beneficiary is spouse, child, grandchild or parent of the policy owner.

Farmers:

  • Livestock, fowl, agricultural machinery and equipment for farm operations up to $5,000.
  • Enough seeds to cultivate 100 acres of land.

Quebec bankruptcy exemptions

Here are the bankruptcy exemptions in Quebec. These exemptions are outlined in the Code of Civil Procedure.

  • Food, fuel, linens and clothing.
  • Household furnishings and appliances up to a value of $6,000.
  • A portion of your wages and salary, based on the number of your dependants.
  • One motor vehicle required for work.
  • Equity in your principal residence less than $6,000.
  • Court awarded or donated support and sums bequeathed for support.
  • Employer contributions to pension, insurance or social welfare plans.
  • Vouchers or transport vouchers provided for employment travel.
  • Disability benefits and accident and sickness insurance reimbursements.
  • Property of a person that he requires to compensate for a handicap.
  • A certain portion of salaries and wages based on the number of dependents.
  • Tools for your trade (tools, operating equipment and resources needed for your trade or occupation).
  • A property declared exempt by a donor or will.
  • RRSPs (except contributions in the last 12 months) and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)
  • Family papers and portraits, medals and other decorations.
  • Items used in religious worship.

Saskatchewan bankruptcy exemptions

Here are the bankruptcy exemptions in Saskatchewan. These exemptions are outlined in the Saskatchewan Enforcement of Money Judgements Act.

  • Clothing and jewelry up to a value of $7500.
  • All medical and dental aids.
  • All household furniture and appliances.
  • Domestic animals that are kept as pets up to a value of $2000.
  • One motor vehicle, up to a value of $10,000.
  • Tools for your trade (tools, operating equipment and resources needed for your trade or occupation).
  • Prepaid funeral services or burial plots for you, your dependents or your family.
  • A home, house trailer or equivalent facility up to the value of $50,000. (must be your primary residence)
  • RRSPs, RRIFs and certain pension plans.
  • Some life insurance policies.

Farmers:

  • Enough cash or crops for food and fuel until the next harvest.
  • All livestock, farm machinery and equipment, including one car or truck, for up to 12 months of operations.
  • Tools of the trade up to $20,000.
  • Two bushels of seed per acre of land.

Yukon bankruptcy exemptions

Here are the bankruptcy exemptions in Yukon. These exemptions are set by the territorial government and outlined in Yukon’s Exemptions Act.

  • Household furniture, utensils, and equipment up to $200.
  • Clothing for you and your family (no limit).
  • Food, fuel, and other necessaries of life that you require for the next 12 months.
  • Live-stock, fowl, bees, books, tools, implements, and other chattels for you or your business, up to $600.
  • Equity in your home up to $3,000.
  • All medical and health aids for you and your family.
  • RRSPs (except contributions in the last 12 months) and pension plans.
  • Life insurance policies. (if the beneficiary is spouse, child, grandchild or parent of the policy owner.)

Can I keep my home in bankruptcy?

In some parts of Canada, there are bankruptcy exemptions for home equity in your home, allowing you to keep a specific amount.

The good news is if you have home equity within the exemption amount, your home is protected if you file for bankruptcy.

But if you have home equity that exceeds the exemption amount, you can pay this additional equity through your bankruptcy to keep your home.

However, when you have lots of home equity, bankruptcy is expensive and probably isn’t your best option. You can protect your home by filing a consumer proposal instead.

If you have no home equity, it makes no sense to sell your home because the creditors will not receive any money.

See also: Does bankruptcy affect my assets?

Conclusion

There’s a myth that you’ll lose everything in bankruptcy.

In fact, bankruptcy exemptions allow you to keep some assets and sometimes even some equity in your home.

If you have substantial assets, protecting them all in a consumer proposal might make more sense.

Because these exemptions change regularly, always consult a Licensed Insolvency Trustee for the most up-to-date information.

A trustee can advise on the best strategy for protecting your assets.

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