“It is a misconception that bankruptcy is meant to be punitive. You will not lose all of your assets in a bankruptcy – there are bankruptcy exemptions to what you surrender to your trustee.”
Bankruptcy gives you protection from your creditors and allows you to make a fresh start. In a bankruptcy you ‘assign’ or surrender your assets to the trustee in exchange for the discharge of your debts. There are however some exceptions to the assets you must hand over to your trustee. These rules, or bankruptcy exemptions, are designed to allow you to keep certain assets that the government feels are reasonable living expenses.While overall bankruptcy is governed by the Bankruptcy and Insolvency Act, bankruptcy exemptions in Canada are set by provincial legislation. How much of each asset you can keep in a bankruptcy depends on the province or territory you live but generally the types of assets that are exempt from seizure by your trustee are similar across Canada.
Generally, the types of assets that you can keep in a bankruptcy include:
- personal items and clothing
- household furniture, food and equipment in your permanent home
- tools necessary to your work
- a motor vehicle with a value up to a certain limit, usually an older vehicle qualifies
- certain farm property
Changes to the Bankruptcy and Insolvency Act have also been made such that you now keep your RRSPs, RESPs and other pension property except for contributions made in the last 12 months.
The amounts that are exempt in a bankruptcy vary by province and change from time to time. We strongly recommend that you contact a Local Bankruptcy Canada Trustee to review your personal situation.
Bankruptcy Exemptions by Province
| Alberta | Quebec | |
| British Columbia | Nova Scotia | Saskatchewan |
| Manitoba | Ontario | |
| New Brunswick | Prince Edward Island |
Alberta – Exempt Property
Statute: Read theCivil Enforcement Act.
- Food for a 12 month period.
- Clothing up to $4,000
- Household furniture and appliances up to $4,000
- One motor vehicle up to $5,000
- Equity in your principal residence up to $40,000,reduced to your share if you are a co-owner
- Tools of your trade up to $10,000
- Farm land where your principal source of income is farming, up to 160 acres
- Farm property requirements for 12 months operations
- Social allowance, handicap benefit or a widow’s pension if the benefits are not intermingled with other funds
- Health aids
To ask about what you can keep if you go bankrupt in Alberta and the rules forbankruptcy exemptions in Alberta, please consult your local Bankruptcy Alberta Trustee.
British Columbia – Exempt Property
Statute: Read theCourt Order Enforcement ActandRegulations.
- Clothing for yourself & your depenants, no dollar limit
- Household goods up to $4,000
- One motor vehicle up to $5,000 (or $2,000 if you behind on child support payments).
- Tools of your trade up to $10,000.
- Principal residence (equity) up to $9,000 (or $12,000 in Greater Vancouver or Victoria)
- Medical aids
To ask aboutwhat you can keep if you go bankrupt in British Columbia and the rules forbankruptcy exemptions in British Columbia,please consult your local Bankruptcy British Columbia Trustee.
Manitoba – Exempt Property
Statutes: Read theExecutions Actand theJudgments Act.
- Food and fuel for six month supply or cash equivalent
- personal clothing
- Household furniture and appliances up to $4,500
- One motor vehicle up to $3,000 where used in employment (no limit for farmers)
- Health & medical aids
- Tools of your trade up to $7,500
- Farm property: buildings and requirements for 12 months operations
- Principal residence up to $2,500 (see farm land), or $1,500 if you are a co-owner
- Farm land where you reside or cultivate, up to 160 acres
- Items needed for religious services
- Locked-in pension plans
- Certain life insurance policies
- Municipal or school property
To ask aboutwhat you can keep if you go bankrupt in Manitoba and the rules forbankruptcy exemptions in Manitoba,please consult your local Bankruptcy Manitoba Trustee.
New Brunswick – Exempt Property
Statute: Read theMemorials and Executions Actand thePersonal Property Security Act.
- Food and fuel for a three month period
- Personal clothing
- Household furniture and appliances up to $5,000 (more in some cases).
- One motor vehicle used for employment up to $6,500 (more in some cases).
- Tools of your trade up to $6,500
- Farm animals to specified limits, their feed for six months, and seeds to specified limits.
- Health and medical aids
- Items needed for religious services
- Pets
- Pension plans
To ask aboutwhat you can keep if you go bankrupt in New Brunswick and the rules forbankruptcy exemptions in New Brunswick,please consult your local Bankruptcy New Brunswick Trustee.
Newfoundland & Labrador – Exempt Property
Statute: Read theJudgment Enforcement ActandRegulationsand the Personal Property Security Act.
- Food and fuel for a twelve month period
- Clothing up to $4,000
- Household furniture and appliances specific types, up to $4,000
- One motor vehicle up to $2,000
- Tools of your trade up to $10,000
- Farm or fishing or aquaculture property up to $10,000
- Principal residence: up to $10,000
- Health and medical aids
- Pets
- Personal items of sentimental value up to $500
- Certain pension plans
- Certain income
To ask aboutwhat you can keep if you go bankrupt in Newfoundland & Labrador and the rules forbankruptcy exemptions in Newfoundland & Labrador,.
Nova Scotia – Exempt Property
Statute: Read theJudicature ActandRegulationsand thePersonal Property Security Act.
- Food and fuel
- Personal clothing
- Household goods up to $6,500, more in some cases
- One motor vehicle up to $3,000, or up to $6,500 if needed for work
- Health and medical aids
- Tools of the trade up to $1,000
- Seeds and livestock for domestic use
To ask aboutwhat you can keep if you go bankrupt in Nova Scotia and the rules forbankruptcy exemptions in Nova Scotia,please consult your local Bankruptcy Nova Scotia Trustee.
Ontario – Exempt Property
Statute: Read theExecutions Act.
Updated for 2015. Note amountswill be indexed annually.
- Household furniture, appliances up to $14,180.
- Personal clothing of unlimited value
- One motor vehicle up to $7,117
- Tools of your trade up to $14,405.
- In the case of a farmer, livestock, fowl, bees, books, tools and implements and other chattels ordinarily used by the debtor in the debtor’s occupation up to $31,379.
- Most pension plans, life insurance policies, and certain RRSPs
To ask aboutwhat you can keep if you go bankrupt in Ontario and the rules forbankruptcy exemptions in Ontario,please consult your local Bankruptcy Ontario Trustee.
Prince Edward Island – Exempt Property
Statute: Read theJudgment and Execution Actand thePersonal Property Security Act.
- Food, fuel, household furniture, appliances up to $2,000
- Personal clothing
- One motor vehicle (needed for occupation) up to $6,500
- Tools of your trade up to $2,000
- Health and medical aids
- Seed for up to 100 acres, other up to $5,000
- 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.
To ask aboutwhat you can keep if you go bankrupt in Prince Edward Island and the rules forbankruptcy exemptions in PEI,please consult your local Bankruptcy PEI Trustee.
Quebec – Exempt Property
Statute: Read theCode of Civil Procedure.
- Food and fuel
- Personal clothing
- Certain household furniture and appliances up to $6,000
- Motor vehicle
- Disability aids, accident benefits
- Tools of your trade
- Farm property
- Principal residence equity value up to $10,000
- Support received through court order, donation, or bequest
- Most property declared exempt by a donor or will
- A certain portion of your wages and salary, based on the number of your dependants
- Benefits payable and employer contributions under an employer-sponsored 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
To ask abouton what you can keep if you go bankrupt in Quebec and the rules forbankruptcy exemptions in Quebec,please consult your local Bankruptcy Quebec Trustee.
Saskatchewan – Exempt Property
Statute: Read theExemptions Actand theSaskatchewan Farm Security Act.
- Food and fuel cash equivalent of supply until the next harvest
- Personal clothing
- Household furniture and appliances up to $4,500 (or $10,000 for a farm)
- One motor vehicle (needed for occupation)
- Tools of your trade up to $4,500
- 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 equity 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
To ask aboutwhat you can keep if you go bankrupt in Saskatchewan and the rules forbankruptcy exemptions in Saskatchewan,please consult your local Bankruptcy Saskatchewan Trustee.
