What Assets Can You Keep in a Bankruptcy?

In bankruptcy, there are some assets you can keep, such as clothing, furniture, tools/items needed for your work, and a basic vehicle. Some assets are protected by federal law and others by provincial law. Exempt assets are protected to help you maintain a basic standard of living.

In this guide, we’ll explore assets you can keep in bankruptcy in more detail – including the different bankruptcy exemptions that apply in each province.

By taking the time to explore this guide, you can get a better idea of what would apply to you and whether personal bankruptcy is a debt solution you’d like to explore in more detail.

What Are Bankruptcy Exemptions? (Things You Keep if You Declare Bankruptcy)

Bankruptcy exemptions are specific assets (things you own or financial arrangements you have in place) that are legally protected from seizure during bankruptcy proceedings. This means they won’t be sold and you won’t have to pay your Licensed Insolvency Trustee (LIT) to keep the asset.

These exemptions allow people who file for bankruptcy to keep items that allow them to maintain a basic standard of living and continue working while they deal with their financial obligations. To help protect your future finances, some financial assets are protected too.

Exempt Assets in All Provinces

In federal law and provincial law, there are lists of certain assets that are protected from creditors and that are protected in a bankruptcy. Federal exemptions are outlined in The Bankruptcy and Insolvency Act and include:

• Property that you are holding in trust for another person
• Property that is exempt according to provincial laws
• GST/HST tax credit payments
• Other than contributions within 12 months of a bankruptcy, savings held in a Registered Retirement Income Fund (RRIF),  Registered Retirement Savings Plan (RRSP), Deferred Profit Share Savings Plans (DPSP) and  Registered Disability Savings Plan (RDSP)*
• Certain payments intended to help with the special needs of individuals, including CERB (Canada Emergency Response Benefit), and CRB (Canada Recovery Benefit), Canada Childcare  Benefit. These payments are not counted as income when your LIT works out if you have surplus income payments during bankruptcy proceedings.

* in some provinces, the entire value of your RRIF, RRSP, RDSP, DPSP are exempt, including contributions in the 12 months before your bankruptcy are not exempt.

Bankruptcy Exemptions by Province

Although bankruptcy laws are governed by federal legislation, each province and territory has its own set of exemption laws that outline which assets a bankrupt individual can keep. As such, specific exemptions can vary from province to province – making it helpful to understand what applies where you live.

Since laws or specific dollar values can change, the following lists of provincial bankruptcy exemptions are intended as guidelines only. However, your Licensed Insolvency Trustee will always make sure you have up-to-the-minute guides and figures to help you make your decision about any debt solution you’re considering.

Alberta

The following list outlines bankruptcy exemptions in Alberta:

• Food: Necessary food for you and your dependents for a 12-month period.
• Clothing: Clothing for you and your dependents up to $4,000.
• Household Furnishings and Appliances: Essential household furniture and appliances up to $4,000.
• Motor Vehicle: One motor vehicle up to $5,000.
• Principal Residence: Equity in your principal residence up to $40,000. If you co-own the home, this amount is prorated based on your ownership share.
• Tools of Trade: Tools and equipment necessary for your trade up to $10,000.
• Farm Property: Up to 160 acres of farmland if your principal source of income is farming, including necessary equipment and supplies for 12 months of operations.
• Health and Dental Aids: All medical and dental aids with no monetary limit.
• Social Allowance, Handicap Benefit, or Widow’s Pension: Exempt if these benefits are not mixed with other funds.
• Registered Savings Plans: RRSP and RESP are fully exempt. For a RDSP, contributions in the 12 months prior to a bankruptcy are not exempt, but the remaining balance is.
• Life Insurance: Life insurance policies where the beneficiary is a spouse, child, parent, or grandparent.
• Pensions: Most pension plans are exempt.

British Columbia

The following list outlines bankruptcy exemptions in British Columbia:

• Clothing: No limit for essential clothing for  yourself and your dependents.
• Household Furnishings and Appliances: Essential household goods up to $4,000.
• Motor Vehicle: One motor vehicle up to $5,000; if you are behind on child support payments, the limit is $2,000.
• Tools of Trade: Tools and property necessary for your work up to $10,000.
• Medical and Dental Aids: No limit on medical and dental aids for yourself and your dependents.
• Principal Residence: Equity in your principal residence up to $9,000, or up to $12,000 if you reside in Greater Vancouver or the Victoria capital area.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt in a preceding the bankruptcy.
• Pensions and Life Insurance: Most pensions and certain life insurance policies are exempt.
• Life Insurance: Life insurance policies where the beneficiary is a spouse, child, parent, or grandparent.

Manitoba

The following list outlines bankruptcy exemptions in Manitoba:

• Food and Fuel: Necessary food and fuel for six months, or the cash equivalent.
• Clothing: No limit on personal clothing for you and your dependents.
• Household Furnishings and Appliances: Essential household furniture and appliances up to $4,500.
• Motor Vehicle: One motor vehicle up to $3,000 if used for employment or business purposes; no limit for farmers.
• Tools of Trade: Tools and equipment necessary for your trade up to $7,500.
• Medical and Health Aids: No limit on medical and health aids for you and your dependents.
• Principal Residence: Equity in your principal residence up to $2,500; if you co-own the property, the limit is $1,500.
• Farm Property: Up to 160 acres of farmland.  Farm machinery, equipment, livestock, and seed necessary for 12 months of operations.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most pension plans and certain life insurance policies.
• Municipal or School Property: Exempt from seizure.

Newfoundland & Labrador

The following list outlines bankruptcy exemptions in Newfoundland and Labrador:

• Food and Fuel: Necessary food and fuel for you and your dependents for a twelve-month period.
• Clothing: Clothing for you and your dependents up to $4,000.
• Household Furnishings and Appliances: Essential household furnishings and appliances up to $4,000.
• Motor Vehicle: One motor vehicle up to $2,000.
• Tools of Trade: Tools and equipment necessary for your trade or business (including farming, fishing, or aquaculture) up to $10,000.
• Medical and Health Aids: No limit on medical and dental aids for you and your dependents.
• Personal Items of Sentimental Value: Personal items of sentimental value up to $500.
• Pets: All pets are exempt from bankruptcy.
• Principal Residence: Equity in your principal residence up to $10,000.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies.

Northwest Territories

The following list outlines bankruptcy exemptions in the Northwest Territories:

• Food and Fuel: Necessary food, fuel, and other essentials for you and your family for the next twelve months.
• Clothing: No limit on clothing for you and your dependents.
• Household Furnishings and Appliances: Essential household furniture and appliances up to $5,000.
• Motor Vehicle: One motor vehicle up to $6,000.
• Tools of Trade: Tools and equipment necessary for your trade up to $12,000.
• Hunting Tools: Tools used for hunting up to $15,000.
• Medical and Dental Aids: No limit on necessary medical and dental aids for you and your dependents.
• Principal Residence: Equity in your principal residence up to $50,000.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies.

Nova Scotia

The following list outlines bankruptcy exemptions in Nova Scotia:

• Food and Fuel: No limit on necessary food and fuel for you and your family.
• Clothing: No limit on clothing for you and your dependents.
• Household Furnishings and Appliances: Essential household furniture and appliances up to $5,000.
• Motor Vehicle: One motor vehicle up to $6,500.
• Tools of Trade: Tools and equipment necessary for your trade, including farm equipment and fishing gear, up to $7,500.
• Medical and Health Aids: No limit on necessary medical and health aids for you and your dependents.
• Seeds and Livestock: No limit on grain, seeds, and livestock for domestic use by you and your family.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies

Nunavut

The following list outlines bankruptcy exemptions in Nunavut:

• Food and Fuel: Necessary food, fuel, and other essentials for you and your family for the next twelve months.
• Clothing: No limit on clothing for you and your dependents.
• Household Furnishings and Appliances: No limit on essential household furniture and appliances.
• Medical and Dental Aids: No limit on necessary medical and dental aids for you and your dependents.
• Tools of Trade and Hunting Equipment: No limit on necessary tools for your trade and hunting equipment.
• Principal Residence: Equity in your principal residence up to $35,000.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies.

Ontario

The following list outlines bankruptcy exemptions in Ontario:

• Household Furniture and Appliances: Essential household furniture, appliances, equipment, food, and fuel up to $14,180.
• Clothing: No limit on clothing for you and your dependents.
• Motor Vehicle: One motor vehicle up to $7,117.
• Tools of Trade: Tools and instruments necessary for your trade or business up to $14,405.
• Farm Property: For farmers, up to $31,379 for livestock, fowl, bees, books, tools, implements, and other chattels ordinarily used in the occupation.
• Principal Residence: If the equity in your home does not exceed $10,783, it is exempt; if the equity exceeds $10,783, the home is not exempt from seizure.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions: Most penisons are exempt.
• Life Insurance: Life insurance policies where the beneficiary is a spouse, child, parent, or grandparent.

Prince Edward Island (PEI)

The following list outlines bankruptcy exemptions in Prince Edward Island:

• Food, Fuel, Household Furniture, and Appliances: Essential household furniture, appliances, equipment, food, and fuel up to $2,000.
• Clothing: No limit on clothing for you and your dependents.
• Motor Vehicle: One motor vehicle up to $6,500 if required for work; otherwise, up to $3,000.
• Tools of Trade: Tools and equipment necessary for your trade or business up to $2,000.
• Medical and Health Aids: No limit on necessary medical and health aids for you and your dependents.
• Farm and Fishing Property: Personal property used in farming or fishing, including livestock, fowl, agricultural machinery, and equipment up to $5,000, as well as enough seed for up to 100 acres.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies.

Quebec

The following list outlines bankruptcy exemptions in Quebec:

• Food and Fuel: All necessary food and fuel.
• Clothing: No limit on clothing for you and your dependents.
• Household Furnishings and Appliances: Essential household furniture and appliances up to $6,000.
• Motor Vehicle: One vehicle required for work.
• Tools of Trade: Tools and equipment necessary for your trade or business.
• Medical and Disability Aids: No limit on necessary medical and disability aids.
• Family Papers and Personal Items: Family papers and portraits, medals and other decorations, and documents.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies.

Saskatchewan

The following list outlines Saskatchewan bankruptcy exemptions:

• Food and Fuel for Farmers: Cash equivalent of necessary food and fuel supply until the next harvest.
• Clothing and Jewellery: Clothing and jewellery up to $7,500.
• Household Furnishings and Appliances: All essential household furniture and appliances are exempt.
• Motor Vehicle: One motor vehicle up to $10,000.
• Tools of Trade: All tools and equipment necessary for your trade. For farmers, tools of the trade including office furniture and equipment, up to $20,000.
• Medical and Dental Aids: All required medical and dental aids.
• Principal Residence: Equity in your principal residence up to $50,000.
• Retirement Savings: All retirement savings plans (RRSPs, RRIFs, DPSPs).
• Pensions and Life Insurance: Most pensions and certain life insurance policies.
• Seed and Crops: Two bushels of seed per acre of land under cultivation.

Yukon

The following list outlines bankruptcy exemptions in Yukon:

• Food and Fuel: Necessary food, fuel, and other essentials for you and your family for the next twelve months.
• Clothing: No limit on clothing for you and your dependents.
• Household Furnishings and Appliances: Essential household furniture, utensils, and equipment up to $200.
• Tools of Trade: Tools, books, and equipment necessary for your trade, including livestock, up to $600.
• Medical and Dental Aids: No limit on necessary medical and dental aids for you and your dependents.
• Principal Residence: Equity in your principal residence up to $3,000.
• Registered Savings Plans: Other than contributions in the 12 months prior to bankruptcy, RRSPs, RDSPs and RRIFs are exempt.
• Pensions and Certain Income: Most penison plans and certain life insurance policies.

What Are Some Typical Non-Exempt Assets?

Like exemptions, non-exempt assets are covered by both federal and provincial laws – so exact lists will vary based on where you live.

Your Licensed Insolvency Trustee will be able to explain what kinds of items and assets you’ll be expected to handover based on where you live – but typical non-exempt assets include:

• Luxury Items: High-value items such as jewellery, art, and collectibles.
• Recreational Vehicles: Boats, snowmobiles, motorcycles, and other recreational vehicles.
• Real Estate: Equity in a second property or a primary residence exceeding the exempted amount.
• Investments: Non-registered investments like stocks, bonds, and mutual funds.
• Savings: Non-exempt portions of RRSPs/RRIFs and contributions made within the last 12 months.
• Bank Accounts: Funds in bank accounts that exceed basic living needs.
• Business Assets: Assets used for business purposes that exceed the exempted tools of trade amount.

Summary: What Assets Can You Keep in a Bankruptcy?

While many people think that bankruptcy will involve having everything you own sold to repay your debt, this isn’t the case.

While the Licensed Insolvency Trustee you’re working with has a duty to repay your creditors (the people, companies, or entities you owe money to) – they also have a responsibility to you. This responsibility is outlined in both federal and provincial laws, and means you will be allowed to keep the things you need to maintain a basic lifestyle and work throughout your bankruptcy proceedings.

Since bankruptcy exemptions vary based on the province you live in, it’s important to talk to your LIT to get a full understanding of what you can keep and what must be surrendered before you decide on bankruptcy or a consumer proposal.

Key Takeaways

• Asset Protection: Bankruptcy allows you to keep essential items such as clothing, basic furniture, tools for work, and certain financial savings to maintain a basic standard of living.
• Federal and Provincial Laws: Exemptions are governed by both federal and provincial laws, providing a framework for what assets you can keep.
• Common Exempt Assets: Typically exempt assets include necessary clothing, household furnishings, tools of trade, a basic vehicle, and retirement savings.
• Non-Exempt Assets: Non-exempt assets often include luxury items, recreational vehicles, real estate equity above the exempted amount, and non-registered investments.
• Provincial Variations: Specific exemptions vary by province, so it’s crucial to consult a Licensed Insolvency Trustee to understand what applies in your location.