What You keep in Bankruptcy

Most people will want to know, what do I keep in bankruptcy?

When a person files for bankruptcy, they are required to disclose all of their assets and items of value.

The trustee takes the non-exempt items and sells them for their cash value.  The funds are then distributed to your creditors by the trustee.

Many assets are exempt from seizure meaning that you are legally able to keep them in a bankruptcy.

Assets exempt in bankruptcy:

• personal clothing and effects
• household furniture
• tools of your trade,
• farm equipment, supplies and livestock, up to $29,100
• pensions, for more info on RRSP’s and Pensions see below,
• cars up to a value of $6,600
• leased vehicles where you have kept up the payments
• secured vehicle where payments are being made

When you file for bankruptcy you surrender your possessions or assets to the trustee.  The trustee then sells the items and distributes the funds to the people you owe money to, the creditors.

★★★★★ Although it was the last thing we wanted to do, YanchDey made this process very smooth, they did all the paperwork and dealt with our creditors.  The garnishee was stopped and we can sleep at night, we now have a fresh start. Many thanks, Debbie S. Ajax

Where you have a home, the home or real estate maybe considered an asset with monetary value.

The value of the home is based upon what if any equity available.  The equity is the value of the property, minus any mortgage. Where the real estate has equity in excess of $10,000, this amount is taken into consideration by the bankruptcy trustee.

Where you’re considering bankruptcy your options are:

• sell the home
• consider a consumer proposal
• refinancing the property

When considering bankruptcy and there is equity in the home many people consider a consumer proposal. In a consumer proposal you usually can save 70% or more on unsecured debt allowing you to keep your home and other property.

Registered Retirement Savings Plans (RRSP) are exempt from bankruptcy in Canada, except for any contributions made within the previous twelve (12) months.

Registered Pension Plans are governed by the Ontario Pension Benefits Act and together with all registered pensions are exempt from bankruptcy.

This includes:

• Government sponsored pension plans
• Company sponsored pension plans

In these plans the assets of the bankrupt are exempt from seizure.

This includes spousal RRSP’s, and Registered Retirement Income Funds (RRIF’s).

Any assets not exempt from seizure in a bankruptcy can be purchased back from the trustee at fair market value.  To find out if you have any non-exempt assets contact us today at no cost to you.