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Bankruptcy, governed by the Bankruptcy & Insolvency
Act, is federal law. What you can keep if you
go bankrupt in Ontario (called exemptions) is governed
by provincial legislation, the Ontario Executions Act.
In Ontario, you are permitted to keep the following items:
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1. |
$5,650 worth of personal possessions
(clothing, jewelry, sports equipment, etc.); |
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2. |
$5,650 for an automobile (click here for a detailed
discussion of cars in a bankruptcy); |
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3. |
$11,300 worth of furnishings; |
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4. |
$11,300 worth of tools of the trade
(equipment that you use to earn a living); and |
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5. |
Certain types of life insurance and locked in RRSPs. |
Please note that if there is a lien registered against
your property it will be up to the secured creditor whether
or not you can keep the asset when you file for bankruptcy
in Ontario (the rules are different in each province).
For example, if you have leased or financed a car, the
lender may allow you to keep the car if you are bankrupt,
provided you continue to make your monthly payments. However,
other lenders have a policy that if you go bankrupt they
seize your car, even if your payments are up to date.
As you can see the rules are complicated, and they change
frequently, so it is crucial that you discuss your property
with your Ontario bankruptcy trustee before filing for bankruptcy in Ontario. You should
be completely clear on what you can keep if you go bankrupt
in Ontario and which property you may lose if you go
bankrupt in Ontario.
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