Can I Keep My Assets? Vancouver Bankruptcy Exemptions
What Can I keep if I go bankrupt in Vancouver?
While it might sound too good to be true you can keep some of your possessions when you go bankrupt in Vancouver, known as the bankruptcy exemptions.
These assets are called bankruptcy exemptions, because they are exempt from seizure by your Licensed Insolvency Trustee.
Vancouver Bankruptcy Exempt Assets
The BC exemptions apply to the equity in the asset, which is the value of the asset when all liabilities are deducted from the value of the asset. The assets you can keep when going bankrupt in BC are:
Equity in a home in Greater Vancouver and Victoria = $12,000. In the rest of the province = $9,000;
Equity in Household items = $4,000;
Equity in a vehicle = $5,000; The vehicle exemption drops to $2,000 if the debtor is behind on child care payments (to facilitate the enforcement of Maintenance Orders);
Equity in work tools = $10,000;
Exemptions are in effect for all registered retirement savings plans (RRSP’s, RRIF’s and DPSP’s (Deferred Profit Sharing Plans). However, any Contributions that were deposited within the 12 months prior to going bankrupt will be recovered (clawed back) and given to the insolvency estate.
Equity in essential clothing and medical aids is unlimited.
As you can see you do not lose everything when you file for bankruptcy in Vancouver.
In fact, most debtors filing for bankruptcy in Vancouver, are able to keep a wide variety of property.
If you would like to speak with a professional about how the Vancouver bankruptcy exemptions would impact your situation the best thing for you to do is to schedule a time to review your assets with a licensed Vancouver Bankruptcy Trustee.
They will be able to advise you what assets you can keep should you file for bankruptcy.
Why are some assets exempt?
Bankruptcy is a process that allows an honest but unfortunate debtor to get a fresh financial start.
However, to achieve the fresh financial start, you need to keep some dignity and some essential assets as a starting point for you and your family to rebuild your financial lives.
These essential assets are your bankruptcy exemptions, and are defined in the law.
What about my bank account?
Your bank account is not an exempt asset in bankruptcy.
However, you should carefully arrange your banking in bankruptcy, to ensure that no inappropriate payments go to your creditors.
You can keep your dignity, but exemptions are complicated
If you file for bankruptcy, you can keep some assets that are essential for you to live your life, provide for your family, and make a living.
Exactly what you can keep depends on your personal circumstances.
Bankruptcy exemption rules are complicated, and change from time to time. Professional advice is essential.
You could keep all your assets (and avoid the matter of exemptions) by filing a consumer proposal – a negotiated settlement between you and your creditors.
Although this option costs more than a bankruptcy, it may help reduce your feelings of guilt.
For more details on bankruptcy exemptions in Vancouver and for answers to your other questions about bankruptcy and consumer proposals, please contact our personal Licensed Insolvency Trustee in your area and arrange for an initial consultation, free of charge.
This federally-licensed professional will examine all the circumstances of your case and advise you on the options available to you.