In bankruptcy you lose or surrender non-exempt property of value the the trustee.
What You Lose in Bankruptcy
In bankruptcy most personal property is exempt, you do not lose them.
What You Lose in Bankruptcy
The Ontario government sets exemption limits for personal property. In bankruptcy you do not lose property under these limits:
- vehicles over $$7,117 in value
- work tools over $11,300 in value
- personal furniture & equipment over $14,180
- farm equipment over $31,379 in value
Property under these levels including personal property such as clothing and items of no real cash value, are exempt and not surrendered in bankruptcy.
Bankruptcy & Items of Cash Value
In bankruptcy, you assign or surrender property of value to a trustee.
There are two types of property in a bankruptcy:
- exempt items, and
- non-exempt items
Exempt items include like clothing and personal belongings.
Non-exempt items would be property over the value set by government and cashable savings like TFSA, RESPs, GICs etc.
★★★★★ 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
Will I Lose my Home in Bankruptcy?
Homes are not automatically lost in bankruptcy. 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.
RRSPs & Pensions in Bankruptcy
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).
Buying Items Back in Bankruptcy
Any assets not exempt from seizure in a bankruptcy can be purchased back from the trustee at fair market value.
Where the bankrupt has property that they do not want to lose, the trustee will assign a value to the property. The bankrupt can then pay that amount so that they do not lose the property.
To find out if you have any non-exempt assets give us a call today.
Speak to an Insolvency Trustee
Questions about what you might lose in bankruptcy? I invite you to call to speak to myself or one of our insolvency trustees.
We’re happy to speak over the phone or in-person at one of our offices.
Where you have questions or need some advice, there is no cost or obligation.
Call us today at 905-721-7506.
