BANKRUPTCY EXEMPTIONS: A LICENSED INSOLVENCY TRUSTEE EXPLAINS

Bankruptcy exemptions are a topic that not many people are familiar with. Many people assume that once you file for bankruptcy, you lose everything. Specific property and assets are protected by law from the bankruptcy process. These “bankruptcy exemptions” are intended to provide you with reasonable living expenses, support your family, allow you to work, and to rebuild your financial position.

 

BANKRUPTCY EXEMPTIONS VARY BY PROVINCE AND TERRITORY

Throughout Canada, bankruptcy is governed by the Bankruptcy and Insolvency Act, but bankruptcy exemptions are regulated by provincial and territorial legislation. That means that each province and territory – Alberta, Northwest Territories and Nunavut included – has its own bankruptcy exemption rules that outline which assets are exempt from seizure and how much equity you can retain. Below is an overview prepared by our Licensed Insolvency Trustee prepared to explain the general bankruptcy exemptions in Alberta, Northwest Territories and Nunavut.

 

BANKRUPTCY EXEMPTIONS IN ALBERTA

In Alberta, the regulations to the Civil Enforcement Act set out what property is exempt from seizure in bankruptcy, including the following:

  • A 12-month supply of food for you and your family
  • Necessary clothing for you and your family up to $4,000
  • Household furnishings and appliances up to $4,000
  • One motor vehicle up to $5,000
  • Equity in your principal residence up to $40,000 (reduced to your percentage of ownership if you are a co-owner of the residence, which can include a mobile home)
  • Personal property required to earn a living (books, tools of your trade, equipment) up to $10,000
  • If you are a farmer, up to 160 acres of farmland is exempt if your principal residence is located on that farmland
  • If you are a farmer, any personal property and necessary equipment for your farming operations over the next 12 months are exempt
  • Certain pensions and life insurance policies
  • All medical devices and dental aids

 

BANKRUPTCY EXEMPTIONS IN NORTHWEST TERRITORIES (NWT)

Bankruptcy exemption regulations to Northwest Territories’ Exemptions Act set out what property is exempt from seizure in bankruptcy, including the following:

  • A 12-month supply of food and fuel
  • All necessary and ordinary clothing for you and your family
  • Household furniture and appliances up to $5,000
  • One motor vehicle up to $6,000
  • Hunting tools up to $15,000
  • Equity in your principal residence up to $50,000
  • Tools of your trade up to $12,000
  • Certain pensions and life insurance policies
  • All medical devices and dental aids

 

BANKRUPTCY EXEMPTIONS IN NUNAVUT

In Nunavut, the following property is exempt from seizure in bankruptcy:

  • 12-month supply of food and fuel for you and your family
  • All clothes for you and your family
  • All household furniture and appliances
  • All hunting tools
  • All tools of the trade
  • Your vehicle (no limit)
  • Equity in your principal residence up to $35,000
  • All medical devices and dental aids
  • Certain pensions and life insurance policies

 

CONSIDERING A PERSONAL BANKRUPTCY? A LICENSED INSOLVENCY TRUSTEE IS HERE TO HELP YOU

While it is generally true that bankruptcy exemptions are similar across Alberta, Northwest Territories, and Nunavut, some differences are depending on the province or territory you live in and the amounts that exempt in a bankruptcy change from time to time. It is in your best interest to contact Fox-Miles & Associates Licensed Insolvency Trustee to review your situation. If you think it may be time for personal bankruptcy or you want to know more about your options, we are here to help. To schedule your free consultation, call us today at 780-444-3939.