How to value “exempt assets” in BC

October 12, 2012 10:09 pm Published by

What are “Exempt Assets” and How to Value them.

When someone declares bankruptcy, they are happy to learn that they don’t automatically lose all of their personal assets.  Also, how to value exempt assets in BC. In a personal bankruptcy or a consumer proposal,  exempt assets are the assets that can be kept from creditors (and in turn the trustee)  The provinces have jurisdiction over deciding which assets are exempt, so each provinces have different personal asset exemptions.

When considering personal debt solutions, a personal bankruptcy or a consumer proposal, one of the first considerations for either alternative is figuring out what assets a debtor can keep and which have to be sold or turned over to the creditors.  In your free consultation with your Licensed Insolvency Trustee, we will help you determine the value of your assets and outline for you which assets you can keep.  Each debtor will assist the trustee with this process by providing information about their assets.  So, how do you value personal assets.?

How to Value Exempt Assets

Your trustee will first ask you to make a general list of your personal assets and to assign a value to the exempt assets.  In British Columbia, the general list of exempt assets include:

Exempt Assets in British Columbia:

  • No limit on clothing for you or your dependents; all clothing is exempt from bankruptcy
  • Household furnishings and appliances up to $4,000
  • One motor vehicle up to $5,000; unless you are behind on child support payments, in which case the limit is $2,000
  • Work tools and work-related property up to $10,000
  • No limit on medical and dental aids for you or your dependents
  • RRSP’s and RESP’s (with some exceptions)

The value of the assets are based on what they can be currently sold for – “as is” value and not at replacement value.  For household items generally a summary of your household assets are based on an “estimated garage sale value” ..  Our experiences in this areas is that the vast majority of time the trustee has no interest in taking your household items – unless you have large valued items such as antiques, baby grand  piano or expensive Persian rugs, all of your assets are generally yours to keep.

For assets of greater value like vehicles, houses, investments etc. as Trustee we generally require 3rd party valuation be provided particularly if the assets have a significant value.  Some 3rd party sources for vehicle values include Back/Blue Book Value and on-line sale sites such as the “Used” sites, or Auto Trader etc., For Real Property (real estate) your Trustee may look to current tax values or real estate appraisals.  The Trustee’s job is to make sure that the value assigned to your assets is  reasonable and verifiable

What information do I need to have in order to file either a Bankruptcy or a Proposal?

In order to either file a bankruptcy or a Proposal you must provide a picture of your personal situation for your creditors and your Trustee. There are legal forms that must be filled out, signed and sworn with the assistance of you Trustee that lists your assets, liabilities, some basic personal information such as the number of people in your household and if you have ever been bankrupt or filed a Proposal before.

As well a Statement of an average monthly family budget that outlines your projected average monthly income and expenses on a projected go-forward basis is needed. This would allow the creditors, the Court, and the Office of the Superintendent of Bankruptcy to have a snapshot of your personal situation as well as an estimate of any money (dividend) that is expected to be available for your creditors at the end of the process.

All of this information will be explained to you at a free initial consultation and each situation will be different.  Taking the first step to understand your options can be the first step towards financial relief.

We offer video or phone consultations to review your personal situation and outline your options .