Protected Assets

Assets that you will not lose if you file personal bankruptcy.

Each Province has enacted legislation that limits the rights of creditors to seize assets of people living in those provinces.

Alberta

Property Exempt from Seizure:

• Food required by the debtor and his/her dependants during the next 12 months
• Necessary clothing of the debtor and his/her dependants up to a value of $4000.
• Household furniture and appliances up to a value of $4000.
• Equity in one motor vehicle not exceeding a value of $5000.
• Medical and dental aids required by the debtor and his/her dependents.
• Where the debtor is a bona fide farmer and whose principal source of livelihood is farming 160 acres if the debtor's principal residence is located on that 160 acres and that the 160 acres is part of the debtor's farm
• The equity in the debtor's principal residence, including a mobile home, up to a value of $40,000. If the debtor is a co-owner of the residence, the amount of the exemption is reduced to an amount that is proportionate to the debtor's ownership interest.
• Personal property (i.e. tools, equipment, books) required by the debtor to earn income from the debtor's occupation up to a value of $10,000.
• Where the debtor's primary income is from farming operations, personal property required by the debtor for the proper and efficient conduct of the debtor's farming operations for the next 12 months.

British Columbia

Property Exempt from Seizure:

• Household goods - $4,000
• Tools of the trade - $10,000
• Motor vehicle - $5,000, ($2,000 for maintenance debtors)
• Home equity - $12,000, ($9,000 outside the GVRD and Capital Regional District)

Plus all necessary clothing and all required medical aids (of a debtor or a dependent).

Be Careful!

1. If you pledge or borrow against these assets you will have lost your ability to protect them from the creditors who obtained security against the assets.
2. If it appears as though the assets will no longer be required for you for your personal use, you may have jeopardized the protection afforded by the various provincial legislations.
3. If the value of the assets you are claiming as exempt increases before you are released from bankruptcy so that the protected exempt amount is exceeded, you may have to pay the surplus equity to your Trustee for the benefit of your creditors.
4. The potential of losing assets applies only in a bankruptcy situation. If you are filing a proposal and the creditors accept your proposal, they or your Trustee will have no right to your assets.