The concept behind personal bankruptcy in Canada is relatively simple: most of your debts are eliminated, but in return you lose the things you own that are not exempt. What assets you get to keep in bankruptcy is governed by provincial legislation and, therefore, the rules regulating bankruptcy exemptions are different in each province.
In general, you are allowed to keep your basic personal belongings, such as clothing and a reasonable amount of furniture. In some provinces you may also be allowed to keep an inexpensive motor vehicle.
Bankruptcy Exemptions by Province/Territory
For details on what you can keep if you go bankrupt, please refer to the specific information on exemptions in bankruptcy for your province/territory:
- British Columbia
- New Brunswick
- Newfoundland & Labrador
- Nova Scotia
- Northwest Territories
- Prince Edward Island
Please note that bankruptcy exemptions in Canada often change. Often provincial governments will update the exemption limits to adjust for inflation or other factors, so what you get to keep if you go bankrupt may change.
It is, therefore, very important to consult with a bankruptcy trustee to confirm what assets you may keep if you go bankrupt. We suggest that you bring a list of your properties to your initial consultation with your trustee. Obtaining appraisals for cars, trucks and real estate is strongly recommended, since many of the provincial bankruptcy exemptions depend on the value of the asset.
After reviewing the information about your properties, your trustee will be able to tell you what assets, according to the rules regulating bankruptcy exemptions, you can keep if you file bankruptcy, so we suggest you to contact a bankruptcy trustee for more information.