Topic: Personal Bankruptcy

home bankruptcy

Keeping a jointly owned home in a bankruptcy

Question from Randy14U on Reddit AMA: Hi Victor, I may have to go bankrupt but my wife doesn’t have to as she doesn’t have the mountain of debt that I have. We have about $80K in equity in our home. Can we keep our home? Half of this equity is hers, how would that affect a bankruptcy for myself? If we simply sell the house, can she take half of the equity while I put the rest towards my debt?

Reply from Victor Fong, Licensed Insolvency Trustee, Toronto, Canada

Hi Randy,

Her share of the equity in the home would not be directly affected by your bankruptcy.

However, the Licensed Insolvency Trustee would attempt to liquidate your share of the equity (that would automatically become property of the trustee upon your filing bankruptcy) in your bankruptcy proceedings by asking her to purchase the trustee’s interest in the house.

A basic calculation of the equity you or your wife would have to “repurchase” from the trustee would be calculated as the current fair market value of your home minus the current outstanding balance on your mortgage less any homestead exemptions in your province, times 50%.  If you or your wife are unable to pay the trustee out all at once, the trustee might be willing to set up a payment plan with you, supported by a promissory note you would give to the trustee. During the time the equity is being paid out, the trustee will register a charge against the property with the land registry office in order to secure the promissory note.

As you suggested in your post, if you were to sell the property prior to filing bankruptcy and she took here share and you paid down your debts with your share of the sale proceeds, that would be perfectly fine so long as you pay your creditors on a pro rata basis. That is, don’t use your share of the money to pay off certain creditors and leave the rest unpaid. You should pay each creditor an equal share according to how much you owe each of them.

debt bankruptcy

Too much debt to file bankruptcy?

Debt is too much? A question asked by a user on Quora:

When declaring bankruptcy can’t be avoided, does it matter how much debt one racks up?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada answers as follows:

The amount of debt accumulated prior to filing bankruptcy is an important factor in determining what would happen in your bankruptcy. There are additional factors as well:

  • How quickly the debt was accumulated prior to bankruptcy.
  • Why was the debt accumulated – i.e., what were the funds used for? Cash advances at the casino? An exorbitant shopping spree? To finance medical bills? To pay for groceries?

For example, using debt to purchase groceries for your family after you’ve been laid off from work would be considered a reasonable explanation for why the debt was accumulated. However, accumulating debt to go off on a gambling or spending spree would not be considered reasonable.

So depending on your answers to the above questions, your bankruptcy proceedings may be straightforward and painless, or problematic and prolonged.

Straightforward and Painless

In Canada if you’re filing bankruptcy for the first time, you can discharged from your bankruptcy in as little as 9 to 21 months. You file, attend two counselling sessions, how the trustee your monthly income and expenditures, pay the trustee his fees (or your surplus income obligation if your average monthly income during those first 9 months exceeds a monthly threshold ).

Problematic and Prolonged

Your discharge from bankruptcy could potentially be opposed by your trustee, one of your creditors, or by the Office of the Superintendent of Bankruptcy. If your discharge is opposed, you will be required to apply for your discharge from bankruptcy with the bankruptcy court. You would be advised by your trustee to retain a lawyer specializing in bankruptcy law to represent you. Upon reviewing evidence of your conduct before and during your bankruptcy, the court will make one of the following orders with respect to your discharge:

  • If your conduct was especially egregious, your discharge shall be refused. This means that you will still owe all your debts and your creditors can recommence legal proceedings against you to collect on their debts.
  • Your discharge will be conditional upon you making a monetary payment to your bankruptcy estate for the benefit of your creditors.
  • Your get an absolute discharge. This basically means you are discharged from your debts with no strings attached.
jail, bankruptcy

I went to jail. Should I file for bankruptcy now?

A Quora user asks: I went to jail. Should I file for bankruptcy now? I went into serious debt?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

If you’ve been released from jail

Having been in jail, you now have a criminal record. With that in mind, what are your chances of getting a job that will pay you enough to: (1) finance your living expenses; and (2) gradually pay off your debts?

To be blunt, it’s hard enough to get a good paying job as it is. Now you face an additional burden of potentially being turned down for employment once a prospective employer conducts a criminal background check.

So my advice: go out there and try to get work and see what happens when they run a background check. If you’re able to get hired despite it and the job pays you well, then gradually pay down your debts.

If you can’t get work because of your record, file bankruptcy (assuming you have no assets) and start fresh.

If you’re currently in jail

Now on the other hand, if you are currently in jail and wish to file bankruptcy, there’s nothing to prevent you from doing so except for the fact that you’ll need to find a Licensed Insolvency Trustee that’s willing to come to visit you in prison in order to: (1) perform a financial assessment of your circumstances; (2) sign the necessary bankruptcy documents with you; and (3) perform your two credit counselling sessions. If you’ve never been bankrupt before, you can be discharged from your debts in 9 months.

tuition-student-loan-bankruptcy

Can university tuition be included in a bankruptcy?

A Quora user asks: Can tuition debt owed directly to a university (not a loan) be discharged in a bankruptcy?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

I’m going to answer your question as it applies to Canada (where I practice).

The general answer is “yes”. It’s only government-guaranteed student loans that are non-dischargeable (unless you’ve been out of school for 7 years at the time you filed bankruptcy).

Now I have two questions: (1) how much do you owe; and (2) in what program were you studying? The reason why I ask is that there’s a very specific situation where the answer might not apply.

If you’re attending law school or medical school and owe a significant amount of money, this may cause problems in you getting discharged from these debts. Generally speaking, according to current case law, loans taken out (be they public or private) to obtain a professional education are not dischargeable. The reasoning is that the education that you receive in law school or medical school is an “asset” that you can use to earn significant income in the future. Therefore, in this specific situation, you’d need to repay the entire loan.

bankruptcy assessment

An assessment of a possible bankruptcy

SummerTO2 asks on Reddit: Hi Victor! Can you perform a bankruptcy assessment of my situation? I have a total of more than $50,000 debt from credit cards and line of credit. My wife and I don’t have car nor home mortgage. I am unemployed right now (but no EI) and my wife is on EI. I am planning to file for personal bankruptcy. How would you assess my situation? And is my wife affected when I file for bankruptcy? We live in Ontario. Thanks!
Hi SummerTO,
Based on the information you’ve indicated in your post, if:
  • You’ve never been bankrupt before;
  • your household consists of just yourself and your wife (i.e., no dependent children); and
  • your combined average net monthly income over the next 9 months will not exceed $2,601 per month
then your bankruptcy will last for 9 months and you’ll be discharged at the end of that 9 month period.
Your wife won’t be affected by your bankruptcy (I’m assuming that you are the only person in the household with financial problems). However, if she has any joint debts with you, those creditors would look to her for payment.
Regarding cost, most trustees will charge a flat fee that can be paid in 9 monthly instalments. In the Greater Toronto Area, fees will generally range from $1,800 – $2,000, paid over 9 months.
Hope this helps!

 

tax debt

Are tax debts dischargeable?

A Quora user asks: is tax debt dischargeable?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

In Canada, income tax debts are dischargeable but with an important caveat.

If your bankruptcy was filed after 18 September 2009 and the following applies to you:

  • Your income tax debt is $200,000 or more; and
  • Your income tax debt comprises 75% or more of your total debts

then you will not be eligible for an automatic discharge from bankruptcy. You will need to apply to bankruptcy court for your discharge and the court will set out the terms of your discharge based on your individual circumstances, such as:

  • the reason why you fell behind in your income taxes
  • your ability to pay some of your income tax debt
  • whether you’ve previously been bankrupt and the reasons for the previous bankruptcy

In Canada, there will be 3 possible outcomes from your discharge hearing in court:

  • Your discharge will be conditional upon you performing some act, such as paying money to your bankruptcy estate for the benefit of your creditors.
  • Your discharge will be refused. An order refusing discharge is made if the bankrupt’s conduct before and during bankruptcy was especially egregious.
  • Your will receive an order of absolute discharge from bankruptcy. That is, your debts will be discharged immediately.
can i buy a home

Can I buy a home after filing for bankruptcy?

Can I buy a home?  A Quora user asks: If I file for bankruptcy, can I still buy a home?

 

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

The following comments are based on Canadian bankruptcy law. I’m also assuming that you’d be an undischarged bankrupt when you purchase the home.

Yes, in theory you can purchase a home so long as someone is willing to give you a mortgage to finance the purchase and is aware of your bankruptcy. It is an offence to obtain credit over $1,000 without disclosing to a lender that you are an undischarged bankrupt.

Aside from this, a question your trustee will ask is this: if you’re filing bankruptcy, how are you getting the money for the down payment? If someone is gifting you the money, then that gift is subject to seizure by your trustee while you’re undischarged.

With the above in mind, the best thing to do would be to wait until you’re discharge before purchasing a home.

Once you’ve been discharged, can start rebuilding your credit by obtaining a secured credit card. A secured credit card is relatively easy to acquire once you’ve obtained your discharge from bankruptcy. You will need to start using it and paying off the monthly balance consistently.

You’ll also need to start putting some money away for a down payment towards your dream home. In Canada, the minimum down payment is 5% of the purchase price if the price is $500,000 or less. If the purchase price is between $500,000 and $999,999, the down payment is 5% of the first $500,000 and 10% of any amount over $500,000.

bankruptcy without spouse

Can I file bankruptcy without my spouse?

Bankruptcy without spouse: a Quora user asks: If my fiance and I decide to get married, can I file for bankruptcy without my spouse, or are both of our names on the bankruptcy petition? No assets.

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

Caveat: I am a bankruptcy trustee in Canada, so I am unfamiliar with the U.S. Bankruptcy Code (I assume you reside in the U.S.). So I am going to provide an answer if your situation was in Canada.

The answer is “no”, you can just file bankruptcy on your own. However, to the extent that your debts are joint with your fiancé, the creditors which are owed these joint debts will be able to go after him to recover what they are owed.

 

bankruptcy before or after marriage

Should I file for bankruptcy before or after marriage?

Alexis Royal asks on Quora: Should I file for bankruptcy before or after marriage?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

Caveat: I am a Licensed Insolvency Trustee in Canada, so I am unfamiliar with the U.S. Bankruptcy Code (I assume you reside in the U.S.). So I am going to provide an answer if your situation was in Canada.

I would advise you to file and compete your bankruptcy proceedings before you are married. During the time that you are in bankruptcy, you are required to disclose to your bankruptcy trustee the income in your entire household (both you and your husband if you’re living together). The trustee requires this household income information in order to calculate how much of your debts you will need to repay during your bankruptcy.

 

foreign debt

Can foreign debt affect me here in Canada?

Foreign debt: Michelle D. on Quora asks: I have debt in the UK and have moved to Canada. Can it affect me over here? Should I go bankrupt in the UK? Can UK bankruptcy affect me in Canada?

I had a voluntary repossession of my car but there is still £5k outstanding. GM Financial have offices in Canada too. Can they pass it to them & affect my credit in Canada? Also have £6k in HSBC credit card. The weak CAD means 1 payment to them both would wipe out 1/2 a month’s salary!

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

You really have 3 questions, so I’m going to answer this in 3 parts…

Can it affect me over here?

The technical answer is “yes” but the practical answer is “no”. In theory, your UK creditors can pursue you in Canada by getting the cooperation of the Canadian courts to help your UK creditors enforce their debts against you in Canada. However, this would cost your UK creditors legal fees since they would have to hire a Canadian lawyer to make an application to a Canadian court to allow this to happen. The legal fees your UK creditors would have to incur would likely exceed the debts you owe them. Therefore, in their mind, it probably wouldn’t be worth their time pursuing you in Canada.

GM Financial in the UK and GM Financial in Canada are technically different two companies in two different jurisdictions. Therefore, GM Financial in Canada shouldn’t be able to pursue you without attending the the above described steps first. This would apply HSBC UK and HSBC Canada as well.

Should I go bankrupt in the UK?

This will depend on whether you plan to return and work in the UK. If you don’t plan to return to the UK, then there might not be any point in you doing anything at all (for the reasons I explained above). If you do plan to return to the UK and don’t want the burden of your creditors garnishing your wages or seizing your assets upon your return, you should meet with a UK bankruptcy trustee and discuss with him/her a possible bankruptcy filing.

Can a UK bankruptcy affect me in Canada?

This will depend on whether you have assets in Canada and the level of your monthly income in Canada. I’m not familiar with the UK bankruptcy laws, but most bankruptcy laws around the world require you to disclose to your bankruptcy trustee your worldwide assets and income. So any assets you might have in Canada may have to be liquidated by your UK bankruptcy trustee. Likewise, you may have to pay a percentage of your monthly income to your UK bankruptcy trustee if our monthly income is over a certain threshold. In the UK, this is called an Income Payment Agreement.

Also, if you are applying for a job in Canada, prospective employers will generally ask if you have filed bankruptcy within the last 5 years. So this may affect your ability to be hired for any future jobs here. Whether you answer “yes” or “no” will depend on how they ask the question: (1) “have you filed bankruptcy within the last 5 years?”; or “have you filed bankruptcy in Canada within the last 5 years?”. You would answer “yes” to the former and “no” to the latter.

 

 

take name off mortgage

Can I take my name off a mortgage and then file for bankruptcy?

Take name off mortgage? A Quora user asks:  Can I take my name off a mortgage and then file for bankruptcy?

I’m going to answer your question assuming that you are not on title of the home and that you merely co-signed the mortgage with another person.

If you are on title of the home and you want to remove your name before filing for personal bankruptcy, my answer will be completely different….

Whether you can take your name off your mortgage will depend on your bank. If the bank feels that the other person on the mortgage has the financial ability to carry the mortgage payments herself, then removing your name shouldn’t a problem. However, if it’s the bank’s view that your co-signor won’t be able to carry the mortgage on her own, then they will not remove your name unless she can get another co-signor to replace you that’s acceptable to the bank.

 

credit report

Will a bankruptcy automatically come off my credit report?

A Quora user asks: Will a bankruptcy automatically come off my credit report after 7 years or do I need to do something proactive to get it off?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

I’m in Canada, so the answer I’m going to give to you pertains to how it works in my country.

Equifax: A bankruptcy gets removed from your credit file 6 years after you’ve been discharged from bankruptcy. If you are not discharged, Equifax will keep a record of your bankruptcy on file for a maximum period of 7 years (14 years for subsequent bankruptcies) from your bankruptcy filing date.

Trans Union: A bankruptcy gets removed form your credit file 7 years (14 years for subsequent bankruptcies) after you’ve been discharged from bankruptcy. If you are not discharged, Trans Union will keep a record of your bankruptcy on file indefinitely until you obtain your discharge.

The bankruptcy should come off your credit report automatically after the 7 years. However, it’s always good to obtain a copy of your credit report from both Equifax and Trans Union at the 7 year mark to confirm that the bankruptcy record has indeed been removed. If not, you will have to contact them to correct this.

cancel bankruptcy

Can my bankruptcy be cancelled or annulled?

Cancel bankruptcy: a user on Quora asks: Can my bankruptcy declaration be cancelled or annulled?

Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:

In Canada, a personal bankruptcy generally cannot be annulled unless:

  • a debtor who is applying to court for an annulment of the bankruptcy can prove to the court that the bankruptcy should not have been filed in the first place (i.e., the debtor was not insolvent and had the ability to pay his creditors). If successful, the court may grant the annulment; or

 

  • the debtor who is in bankruptcy files a proposal under the Bankruptcy & Insolvency Act (either a consumer proposal or if his non-mortgage debt is more than $250,000, a commercial proposal – also known as a Division I proposal). Upon the acceptance of the proposal by the debtor’s creditors and the bankruptcy court, the bankruptcy will be annulled. However, if the debtor defaults on the payment of the proposal, he will find himself in bankruptcy again.
income tax collections

How the Canada Revenue Agency collects income taxes

Income tax collections. The phone call or letter you’ve been dreading from the Canada Revenue Agency has finally arrived. You’ve performed a Google search and probably stumbled upon this article. This post is an overview of how the Canada Revenue Agency collects tax debt.

The Canada Revenue Agency (“CRA”) has significant powers under the Income Tax Act (“ITA”) to collect personal income tax debt. This post examines the collection procedures most commonly used.

Charge over real property

Under Section 223 of the ITA, the CRA can register a lien over a debtor’s home (or any other real estate owned by the debtor). It does so through the following steps:

  • The Ministry of Revenue issues a certificate which certifies an amount owing by the tax debtor
  • This certificate is registered with the Federal Court and when so registered, it has the same effect as if the certificate were a judgment obtained against the debtor for the amount owing plus interest until the amount is paid
  • The certificate shall be deemed to be a judgment of the Court against the debtor for a debt due to Her Majesty in Right of Canada
  • Evidence of the certificate registered with the Court and a writ issued by the Court are filed with the land registry where the debtor’s property located. This creates a lien in favour of Her Majesty for the tax debt owed.

Once this lien is registered, it effectively functions as a charge on the property and can only be removed once the tax debt is paid in full. Not even a proceeding under the Bankruptcy and Insolvency Act (such as a bankruptcy or consumer proposal) can remove this lien, as bankruptcy is only effective if it is filed before the lien is created.

Garnishment

Under Section 224(1) of the ITA, the CRA can issue a “Requirement to Pay” to a debtor’s bank or employer (the “Garnishee”), requiring it to remit proceeds to the CRA in order to satisfy the tax debt. If the Garnishee fails to comply, it is personally liable to the CRA for the amount that should have been remitted.

Such a garnishment can be stopped by filing a proceeding under the Bankruptcy and Insolvency Act, such as a personal bankruptcy or a consumer proposal.

If you are being garnished by the Canada Revenue Agency for unpaid income taxes, please contact your local bankruptcy trustee who can discuss your situation with you.

This post should not be interpreted as legal advice or a legal opinion. Please consult your local Licensed Insolvency Trustee to review your own particular circumstances.

© Copyright www.Bankruptcy-in-Canada.com, 2013.

income tax debt

Income tax debt and personal bankruptcy

Income tax debt. Despite beliefs to the contrary, personal income tax debt is treated no differently than most other types of debt under Canadian bankruptcy law. However, this statement comes with a caveat, which we’ll examine later later in this post.

Here is a typical scenario that occurs across frequently:

  • The debtor is self-employed and for one reason or another, has not filed personal income tax returns for a number of years;
  • She eventually has her earnings garnished by the Canada Revenue Agency. She calls CRA to find out what’s going on, and is told that they performed an arbitrary assessment of the income taxes that she owes, since she never filed her tax returns.

Here are the steps you should take:

  • Get your income tax returns filed. Once CRA assesses your income tax returns as filed, you may actually owe a lot less income tax than what CRA initially assessed. If that’s the case, you may be able to pay off your income tax obligations on your own;
  • However, if the actual amount assessed is still unmanageable, you should contact a bankruptcy trustee to determine what your options are to deal with your income tax (and other) debts.

Two formal options under the Bankruptcy and Insolvency Act are to file for personal bankruptcy or alternatively, make a settlement with CRA by way of a consumer proposal.

In contemplating filing for personal bankruptcy, you should be mindful of the following:

  • New amendments to the Bankruptcy and Insolvency Act came into force on 18 September 2009. An individual who filed bankruptcy prior to that date would be eligible for an “automatic” discharge; that is, she would be discharged automatically after fulfilling certain financial and counselling obligations without having to go to court to obtain her discharge;
  • If you file for personal bankruptcy on or after 18 September 2009 and you have: (1) at least $200,000 in personal income tax debt; and (2) the tax debt comprises 75% or more of your total debt, then you will be required to attend a discharge hearing with the bankruptcy court. The court will review your bankruptcy file and you may be required to pay more money to your bankruptcy estate as a condition of your discharge;
  • For example, as a rule of thumb, the Toronto bankruptcy court requires a bankrupt to pay between 10-15 percent of the principal balance of her personal income tax debts as a condition of her discharge. If the circumstances that led to her bankruptcy are particularly egregious (e.g., this is her second bankruptcy and her first bankruptcy was also income tax driven), she may be required to pay an even higher amount.

If you are contemplating filing a proposal to CRA, you should be mindful of the following:

  • If your total debts (defined as all debts excluding your mortgage on a principal residence) are less than $250,000, you will be eligible to file a consumer proposal. This is a streamlined approach of getting your proposal approved and your proposal can be automatically approved by your creditors within 45 days after being filed by a trustee;
  • If your total debts (defined as all debts excluding your mortgage on a principal residence) are more than $250,000, you will be required to file a Division I proposal. This requires a formal meeting of creditors and an application to the bankruptcy court to get your proposal approved. If your proposal is not approved by either the creditors or the court, you are deemed to have filed for bankruptcy at the creditors meeting or at the motion application, as the case may be;
  • Put your best foot forward. That is, offer the very best settlement you can afford when dealing with the CRA. CRA is very sophisticated in dealing with tax debtors who’ve undertaken formal insolvency proceedings, so it is best to deal with them in a straightforward manner.

This post should not be interpreted as legal advice or a legal opinion. Please consult your local Canadian Licensed Insolvency Trustee to review your own particular circumstances.

© Copyright www.Bankruptcy-in-Canada.com, 2013.

what can you keep

What can you keep when filing bankruptcy – federal and provincial exemptions

What can you keep when filing for personal bankruptcy?

This is a common question. When an individual files for personal bankruptcy, her Licensed Insolvency Trustee takes possession of her property, which is then used to satisfy her outstanding debts.  This is the general rule of thumb. However, the trustee (and therefore the bankrupt’s creditors) are not entitled to any property that is considered exempt under the federal Bankruptcy and Insolvency Act or under the laws of the provinces in Canada.  In these instances, the exempt property in questions continues to be the property of the bankrupt.

The various federal and provincial exemptions are as follows:

The federal Bankruptcy and Insolvency Act

Section 67 of the Bankruptcy and Insolvency Act (BIA) establishes four general categories of exempt property:

  • property held by the bankrupt in trust for other persons;
  • property of the bankrupt that is exempt from seizure under the applicable provincial law where the property is situated and where the bankrupt resides;
  • GST credit payments and prescribed payments relating to the essential needs of individuals; and
  • Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs),  and Deferred Profit Sharing Plans (DPSPs) apart from any contributions made in the last 12 months before bankruptcy.

Provincial & Territorial Exemptions

The policy reason for ensuring that a debtor can retain certain property is straightforward:  a person requires essentials such as clothing, household goods and property necessary to earn a living.  Moreover, provincial laws may also exempt certain forms of retirement savings in order to encourage people to save for their retirement years.

Alberta

  • food for a 12-month period;
  • clothing up to a value of $4,000;
  • household furniture and appliances up to a value of $4,000;
  • a motor vehicle to a value of not more than $5,000;
  • equity in a principal residence up to $40,000 (reduced to the debtor’s share if he or she is a co-owner);
  • where the debtor is a bona fide farmer whose principal source of income is from farming, 160 acres of land if the debtor’s principal residence is located on the 160 acres and that tract of land is part of the debtor’s farm;
  • farm property required for 12 months’ operations;
  • personal property required to earn an income to a maximum value of $10,000; and
  • social allowance, handicap benefit or widow’s pension, if these benefits are not intermingled with other funds;
  • health aids.

British Columbia

  • equity in a home in Greater Vancouver and Victoria equal to $12,000; in the rest of the province, home equity to a maximum of $9,000;
  • household furniture and appliances up to a value of $4,000;
  • a motor vehicle to a value of not more than $5,000 (the vehicle exemption is reduced to $2,000 if the debtor has not made child maintenance payments);
  • tools and other personal property required to earn an income to a maximum value of $10,000;
  • clothing and medical aids of unlimited value.

Manitoba

  • Food and fuel: six months’ supply or cash equivalent.
  • Clothing: no dollar limit.
  • Household furniture and appliances: up to $4,500
  • One motor vehicle (needed for occupation): non-farmers up to $3,000, farmers no limit.
  • Health aids: no dollar limit.
  • Tools of your trade: up to $7,500.
  • Farm property: buildings and requirements for 12 months operations.
  • Principal residence: farm house; non-farmers up to $2,500, or $1,500 if you are a co-owner.
  • Farm land: up to 160 acres.
  • Items needed for religious services.
  • Locked-in pension plans.
  • Certain life insurance policies.
  • Municipal or school property.

New Brunswick

  • Food and fuel: three months’ supply.
  • Clothing: no dollar limit.
  • Household furniture and appliances: up to $5,000 (more in some cases).
  • One motor vehicle (needed for occupation): up to $6,500 (more in some cases).
  • Health aids: no dollar limit.
  • Tools of your trade: up to $6,500.
  • Farm property: farm animals to specified limits, their feed for six months, and seeds to specified limits.
  • Items needed for religious services.
  • Pets
  • Pension plans

Newfoundland and Labrador

  • food and fuel required by the debtor andher dependants during the next 12 months;
  • necessary clothing of the debtor and her dependants up to a maximum value of $4,000;
  • household furnishings, utensils, equipment and appliances up to a maximum value of $4,000;
  • one motor vehicle to a maximum value of $2,000;
  • medical and dental aids required by the debtor and her dependants;
  • items of sentimental value to the debtor valued at not more than $500;
  • domesticated animals (pets) not used for a business purpose;
  • the debtor’s principal residence to a maximum value of $10,000;
  • either
    1. personal property used to earn income from an occupation, trade, business or calling to a maximum value of $10,000; or
    2. where the debtor’s primary occupation is farming, fishing or aquaculture, personal property ordinarily used by and necessary for the debtor to earn income from those occupations to a maximum value of $10,000;
  • a pension plan, unless otherwise provided;
  • property as prescribed by regulation; and
  • net income to a maximum prescribed amount.

Nova Scotia

  • Food and fuel: no dollar limit.
  • Clothing: no dollar limit.
  • Household goods: up to $6,500, more in some cases.
  • One motor vehicle: up to $3,000, or up to $6,500 if needed in occupation.
  • Health aids: no dollar limit.
  • Tools of any occupation: up to $1,000.
  • Seeds and livestock for domestic use: no dollar limit.
  • Principal residence: none.

Ontario

  • Household furnishings and appliances up to $13,150
  • your principal residence is exempt from seizure IF the equity in your home does not exceed $10,000. If the equity does exceed $10,000 then your principal residence is subject to seizure and sale
  • All necessary clothing
  • Tools of the trade up to $11,300
  • A vehicle valued up to $6,600
  • Pensions
  • Other special exemptions for farmers
  • Certain life insurance policies and certain RRSPs

Prince Edward Island 

  • Food, fuel, household furniture, appliances: up to $2,000.
  • Clothing: no dollar limit.
  • One motor vehicle (needed for occupation): up to $6,500.
  • Health aids: no dollar limit.
  • Tools of your trade: up to $2,000.
  • Farm property: seed for up to 100 acres, other up to $5,000.
  • Principal residence: none.
  • RRSPs with beneficiary a family member: no dollar limit.

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

Quebec

  • unlimited food and fuel;
  • unlimited clothing;
  • household furniture and appliances up to $6,000;
  • motor vehicle (no dollar limit);
  • disability aids and accident benefits;
  • tools of your trade (no dollar limit);
  • farm property (no dollar limit);
  • up to $10,000 equity in a principal residence;
  • an immovable serving as a principal residence, in certain cases, where the amount of the claim is less than $10,000;
  • support that has been court-ordered, donated, or received in a bequest;
  • property declared exempt by a donor or a will;
  • a portion of salary, based on the number of the debtor’s dependants;
  • benefits payable and employer contributions under a pension plan;
  • family papers and portraits, medals and other decorations, and documents;
  • items used in religious worship;
  • income for services as a minister of religion;
  • food, lodging and transportation passes received for employment travel.

Saskatchewan

  • Food and fuel: cash equivalent of supply until the next harvest.
  • Clothing: no dollar limit.
  • Household furniture and appliances: up to $4,500 (or $10,000 for a farm).
  • One motor vehicle (needed for occupation): no dollar limit.
  • Health aids: none.
  • Tools of your trade: up to $4,500.
  • Farm property: 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.
  • Principal residence: up to $32,000 (your share) and associated land up to 160 acres.
  • All retirement savings plans: RRSPs, RRIFs, and DPSPs.
  • Certain life insurance policies.

Yukon, Northwest Territories, and Nunavut

  • a 12-month supply of food and fuel;
  • clothing (no dollar limit);
  • household furniture and appliances up to $200;
  • health aids;
  • tools and animals of one’s trade, including a motor vehicle, up to $600;
  • equity in a principal residence up to $3,000; and
  • RRSPs associated with insurance policies.

However, none of the exemptions in the territories apply if a debtor is behind on child or spousal payments, or has absconded from the territories, leaving no spouse or family behind.

Disclaimer:

This material deals with complex matters and may not apply to particular facts and circumstances. As well, the material and the references contained therein reflect laws and practices that are subjects to change. For these reasons, this article should not be relied upon as a substitute for specialized professional advice in connection with any particular matter.

For interpretation of the rules in your case, we strongly recommend that you contact a Licensed Insolvency Trustee to review your situation to determine which assets would be exempt if you were to file for bankruptcy.