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What will happen to my assets?

Your Licensed Insolvency Trustee will not take possession of certain assets if they are exempt from seizure. When you file for bankruptcy your assets vest in the trustee, but that being said there are assets that you will be able to keep. Each province in Canada has different exemptions, in British Columbia, the following assets are exempt:

  • Clothing and medical aids, unlimited value;
  • Household furnishings and appliances up to $4,000 (garage sale value);
  • Work tools up to a value of $10,000 (liquidation value);
  • One vehicle up to $5,000*;
  • $9,000 equity in your residence outside the Capital Regional District and Metro Vancouver;
  • $12,000 equity in your residence in the Capital Regional District and Metro Vancouver;
  • RRSPs less the value of contributions made in the previous 12 months. Depending on the type of RRSP/Pension Plan you have, it may be protected from your creditors by law.

Non-exempt assets, or assets that have a value over and above the above-mentioned exemption amounts must be turned over to the trustee or repurchased in order to keep them. Examples of these may include, but are not limited to:

  • Cash assets such as TFSA (tax-free savings accounts) or non-registered investments (GIC, RESP, savings bonds);
  • Certain personal effects like a recreational vehicle or jewellery; and
  • Equity in recreational or rental properties.

Assets that you acquire during your bankruptcy, such as lottery winnings or inheritances, are also assets available to your creditors and must be turned over to the trustee.

It should be noted that in a consumer proposal, the assets usually do not vest in the trustee, but the trustee must consider the value of the non-exempt assets when determining what an offer to your creditors might look like.

We recommend that you speak to a Licensed Insolvency Trustee to find out more about how a bankruptcy or consumer proposal will affect your assets.

*If you are in arrears on child or spousal support, this amount is reduced to $2,000.

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