When a person considers filing an assignment in bankruptcy, they are typically concerned with what assets they will lose.  They need a fresh start from their debt, but they also may need their vehicle to be able to earn a living and provide for their family.

In order for a debtor to retain the basic necessities of life, there are certain assets that are exempt from seizure under the Ontario Executions Act.  A creditor is unable to seize, and a bankrupt may keep the following assets:

  • All necessary clothing.
  • Household furnishings and appliances up to a liquidation value of $13,150. In all of the years that I have practiced as a Licensed Insolvency Trustee, I have never seized any household furnishings in a personal bankruptcy.
  • Personal vehicle up to a liquidation value of $6,600. The trustee will typically look at the black book liquidation value of your vehicle.   If it is worth less than $6,600, then you are able to retain your vehicle in a bankruptcy.  If your car is worth more than $6,600, then you must pay the trustee the excess value in order to keep it.
  • Tools that are used for you to earn a living up to a liquidation value of $11,300. This exemption would include tools and equipment (for example, scaffolding, paint brushes, etc. for a painter) for a self-employed or employed individual with a letter from their employer.
  • Livestock, tools and chattels up to $29,100 for a debtor engaged solely in farming.
  • Medical aids and devices that are required to assist with a disability or a medical or dental condition.
  • A principle residence is also exempt from seizure if the equity is $10,000 or less. If the equity exceeds $10,000, then there is no exemption in Ontario.

In addition to the above exempt assets under the Execution Act in Ontario, other legislation provides for exemptions for RRSPs and RRIFs (other than contributions in the twelve months preceding a bankruptcy). Life insurance policies with a designated beneficiary of a parent, spouse, or child are also exempt from seizure in a bankruptcy.

Please contact Taylor Leibow Inc., Fresh Start Now, with any specific questions you may have on how a bankruptcy will affect your assets or for a free initial consultation on debt solutions.

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