One of the first concerns expressed by many debtors that are exploring an assignment in bankruptcy is “I don’t want to lose my house” or “Can I keep my car?”  I understand that retaining your family’s home and transportation to get to work to be able to earn income is a priority and there is legislation to protect some of your assets.

In a bankruptcy, the trustee must realize assets that have a value to distribute to your creditors.  The trustee analyzes the selling value of your assets less any secured loans (mortgages, car loans), less any exemption, and must realize on the excess value.  If there is no excess value, you can keep the asset.  The trustee can “realize” on the asset by accepting an offer from you to pay to keep the asset or by selling the asset.

The Ontario Executions Act was amended December 19, 2025, to increase the exempt amount for the following assets:

  • Household furniture and appliances up to a liquidation value of $17,091;
  • Tools of trade (required to perform your work or operate your business) up to $17,362;
  • Motor vehicle up to $8,578; and
  • Principal residence if the equity is less than $12,997

Additionally, RRSPs and RDSPs are exempt from seizure, except for contributions made in the last twelve months.

If the value of your assets significantly exceeds the exemptions, the trustee will explore if a consumer proposal can provide you with a viable solution to deal with your debt.  A proposal allows you to keep your assets and offer a compromise to your creditors, payable over 5 years, with no further interest.

I have been helping people find a solution to overwhelming debt for over 30 years.  Reach out today – I am ready to talk when you are.

Kathy Lenart

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)