Assets a Bankrupt Person can Keep
Here is an example: A person who owns a car worth $13,000 has a loan against it in the amount of $7,000. This means that the individual has $6,000 of equity in the automobile. The vehicle exemption in Ontario is $6,600 (effective on December1, 2015) and in this example it would be possible for the person to keep their automobile because the equity ($6,000) is less than the bankruptcy exemption for a vehicle ($6,600).
Ontario is changing its bankruptcy exemptions on December 1, 2015
The changes in the bankruptcy exemptions are:
|Asset Class.||Limit before Dec 1, 2015.||Limit after Dec 1, 2015.|
|Tools of trade||$11,300||$11,300|
Exemptions are in effect for all registered retirement savings plans (RRSP’s, RRIF’s and DPSP’s (Deferred Profit Sharing Plans).
Contributions made in the 12 months prior to the date of bankruptcy will be recovered (clawed back) for the benefit of the bankruptcy estate.
You may have noticed that there is a $10,000 exemption for a home, effective on December 1, 2015. If you have a home that you want to keep and you have more that $10,000 of equity in the home you can file a consumer proposal and keep your home. A consumer proposal must offer the creditors more than they would get in a bankruptcy. A consumer proposal cannot be for more than 5 years.
If the creditors do not accept the consumer proposal you will not be automatically in bankruptcy.