canada bankruptcy exemptions
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Depending on the financial situation, declaring bankruptcy could be the best option to eliminate debt and allow you to start over with a clean slate. If it is determined that bankruptcy is the right solution, don’t worry — we'll give you all the facts you need to understand the process and get started on rebuilding your worth today.
To help put you back on the path to rebuilding your worth, each Canadian province has a number of bankruptcy exemptions, allowing you to keep some assets and a prescribed value of others.
What Do I Keep In A Bankruptcy? Provincial Bankruptcy Exemptions
Under the federal Bankruptcy & Insolvency Act (BIA) each province sets their own rules and regulations as to how the assets of a bankrupt are handled. Your Bromwich+Smith Debt Relief Specialist and Licensed Insolvency Trustee will go over your assets with you and explain what would be affected by a bankruptcy.
Note: Although the following amounts were accurate at time of publication, it is always best to talk to a Debt Relief Specialist at Bromwich+Smith to determine how asset exemptions would affect your specific financial situation. Further, certain contributions to savings plans, the selling or purchase of assets including luxury items, and gifts within a prescribed time period preceding your bankruptcy may not be covered by asset exemptions. Further, exemptions with no dollar value are usually limited to what you and your family reasonably need.
Personal exemptions by province/territory
- British Columbia
- Alberta
- Saskatchewan
- Manitoba
- Ontario
- Quebec
- New Brunswick
- Prince Edward Island
- Nova Scotia
- Newfoundland & Labrador
- Nunavut
- Northwest Territories
- Yukon
- Surplus Income
British Columbia (BC) - Asset Exemptions In Bankruptcy
| Registered Savings Plans - Example: RRSP's RRIF's | Exempt - Contributions made in last 12 months are not exempt |
| Pensions | Exempt |
| Home | $12,000 in equity in Greater Vancouver & Victoria - $9,000 in equity in all other regions |
| Clothing | Exempt - No limits for you or for your dependents. |
| Medical / Dental Aids | Exempt - Unlimited |
| Household Items | $4,000 (Based on reasonable amount that could be obtained by sale of items). |
| Vehicle | $5,000 (Decreased to $2,000 if behind in Child Care payments |
| Work Tools | $10,000 |
Alberta (AB) - Asset Exemptions In Bankruptcy
| Registered Savings Plans & Life Insurance |
RRSP, RESP, RDSP: Exempt - Unusual contributions may not be exempt. Life Insurance: Exempt if beneficiary is spouse, child, parent or grandparent |
| Pensions | Exempt |
| Home | Up to $40,000 in equity in your principal home |
| Clothing | $4,000 for necessary clothing |
| Medical / Dental Aids | Exempt - Unlimited |
| Household Items | $4,000 (Based on reasonable amount that could be obtained by sale of items). |
| Vehicle | $5,000 |
| Work Tools | $10,000 |
| Farmers |
Up to 160 acres and personal property required for the efficient operation of farm for next 12 months. |
Saskatchewan (SK) - Asset Exemptions In Bankruptcy
| Registered Savings Plans - Example: RRSP's RRIF's | Exempt - Contributions made in last 12 months are not exempt. |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | Up to $50,000 in equity |
| Clothing | $7,500 |
| Medical / Dental Aids | Exempt - Unlimited |
| Household Items | Exempt |
| Vehicle | $10,000 |
| Work Tools | Exempt |
| Farmers | Enough cash or crops to provide until next harvest. Equipment and livestock for 12 months of operations. Tools of trade up to $20,000. |
Manitoba (MB) - Asset Exemptions In Bankruptcy
| Registered Savings Plans - Example: RRSP's RRIF's | Exempt - Unusual contributions may not be exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | Up to $2,500 in equity |
| Clothing | Exempt |
| Medical / Dental Aids | Exempt |
| Household Items | $4,500 |
| Vehicle | $3,000 - One vehicle when used for trade or work. |
| Work Tools | $7,500 |
| Farmers | Animals and equipment for 12 months operations. Home Quarter. Seed. |
Ontario (ON) - Asset Exemptions In Bankruptcy
| Registered Savings Plans & Life Insurance |
RRSP & RDSP: Exempt, except for contributions in the 12 months before the date of bankruptcy. RESP: No exemptions Life Insurance: Exempt if beneficiary is spouse, child, parent or grandparent |
| Pensions | Exempt |
| Home |
If the equity in your home does not exceed $10,783, your home is exempt; if the equity exceeds $10,783, then your home is not exempt from seizure. |
| Clothing | Exempt |
| Medical / Dental Aids | Exempt |
| Household Items | $14.180 |
| Vehicle | $7,117 |
| Work Tools | $14,405 |
| Farmers | $31,379 For those engaged solely in the tillage of soil or farming: Livestock, bees, fowl, books, tool and other implements and chattels usually used in in the occupation of farming. |
Quebec (QC) - Asset Exemptions In Bankruptcy
| Registered Savings Plans - Example: RRSP's, RRIF's | Exempt, except for contributions in the 12 months before the date of bankruptcy. |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | $10,000 |
| Clothing | Exempt |
| Medical / Dental Aids | Exempt |
| Household Items | $6,000 |
| Vehicle | Exempt |
| Work Tools | Exempt |
| Farmers | Exempt |
New Brunswick (NB) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types of Government Pensions - Exempt - Contact us for details. |
| Home | Not Exempt |
| Clothing | Exempt |
| Medical / Dental Aids | Exempt |
| Household Items | $5,000 |
| Vehicle | $6,500 |
| Work Tools | $6,500 |
| Farmers | Animals, equipment seed. |
Price Edward Island (PE) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | Not Exempt |
| Clothing | Exempt |
| Medical / Dental Aids | Exempt |
| Household Items | $5,000 |
| Vehicle | $6,500 if used for work transportation. $3,000 if not used for work. |
| Work Tools | $2,000 |
| Farming / Fishing | Personal property used to earn income up to $5,000 |
Nova Scotia (NS) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | Not Exempt |
| Clothing | Exempt |
| Medical / Dental Aids | Exempt |
| Household Items | $5,000 |
| Vehicle | $6,500 |
| Work Tools | $7,500 |
| Farmers |
No limit on grain and seeds or livestock for domestic use by you and your family. |
Newfoundland & Labrador (NL) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | $10,000 |
| Food & Clothing |
Food and fuel required by you and your dependents for 12 months. Clothing for you and your dependents: $4,000 |
| Medical / Dental Aids | Exempt |
| Household Items | $4,000 |
| Vehicle | $2,000 |
| Work Tools | $6,500 |
| Farming / Fishing | Personal property used to earn income up to $10,000 |
Nunavut (NU) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | $35,000 |
| Clothing & Food | Clothing: Exempt. Enough food & fuel for 12 months. |
| Medical / Dental Aids | Exempt |
| Household Items | Exempt |
| Vehicle | Exempt |
| Work Tools | Exempt |
| Farming / Fishing | Exempt |
Northwest Territories (NWT) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | $50,000 |
| Clothing & Food | Clothing: Exempt. Enough food and fuel for 12 months. |
| Medical / Dental Aids | Exempt |
| Household Items | $5,000 |
| Vehicle | $6,000 |
| Work Tools | $12,000 |
| Hunting Tools | $15,000 |
Yukon (YU) - Asset Exemptions In Bankruptcy
| Register Savings Plans - Example: RRSP's RRIF's | Exempt |
| Pensions | Certain Types - Exempt - Contact us for details. |
| Home | $3,000 |
| Clothing & Food. | Clothing: Exempt.
Food, fuel, and other necessities of life for your family for 12 months |
| Medical / Dental Aids | Exempt |
| Household Items | Up to $200 |
| Vehicle | Not Exempt |
| Work Tools including livestock | $600 |
What Happens to My Earnings During Bankruptcy? Surplus Income Defined.
No matter where you reside in Canada, the distribution of your earnings during bankruptcy is governed by the Federal Government Office of the Superintendent of Bankruptcy, and is determined by what is called Surplus Income. Simply put, your income is compared to an amount called the Surplus Income Threshold, which sets the amount of take home income a person or a family needs for a reasonable standard of living, based on their family size and family situation. You get to keep everything up to this threshold amount. For any income above the threshold, you are required to submit 50% of this excess income for the duration of your bankruptcy.
Surplus income will also determine the length of your bankruptcy. If a person has no surplus income and this is a first time bankruptcy, the federal government has regulated that a bankruptcy will be for a period of 9 months. If there is surplus income and it is greater than $200 over the threshold, a first time bankruptcy will be extended 12 months, for a total of 21 months. A second bankruptcy with surplus income will be extended by 27 months, for a total of 36 months.
Surplus Income Threshold for 2019:
| Family Size: 1 | $2,203 |
| 2 | $2,743 |
| 3 | $3,372 |
| 4 | $4,094 |
| 5 | $4,644 |
| 6 | $5,237 |
| 7 | $5,831 |
The monthly surplus income payment is calculated using the following formula:
Net Income after Deductions – Federal Threshold Amount = Surplus Income x 50% = Payment
Example: Jill lives by herself and takes a salary of $2,504 home per month. Here Surplus Income payment, using the formula above, would be: $2,503 (Take home income) – $2,203 (Threshold amount, based on a family size of one person) = $300 x .5 (Surplus income payment is based on 50% of any income over the threshold amount = $150 Therefore, Jill would be required to pay $150 every month in surplus income payments for the duration of her bankruptcy. If her income increases, she will be required to pay more, and if her income decreases, the amount she pays will be less.
Net Income is based on the total take home income of all family members living in the household of the bankrupt.
Deductions include: Child care payments, support payments, medical payments, and other employment expense that are normally deducted when preparing your income taxes.
You can only file for bankruptcy through the help of a federally Licensed Insolvency Trustee like Bromwich+Smith.