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What Assets Can You Keep if You Declare Personal Bankruptcy in Canada?

In Canada, the laws governing personal bankruptcy are federal, which means that the law is consistent throughout Canada.  But each province has passed unique rules that allow some personal assets, some types of income and specific belongings to be kept away from creditors even if an individual isn’t bankrupt.  These rules also act as a safeguarded during the personal bankruptcy process.


A General overview of Exempt Assets in Canada – Bankruptcy or Consumer Proposal. 


In Canada, the federal Bankruptcy and Insolvency Act defines three kinds of exemptions:

  • Property you hold in trust for other persons.
  • GST credit payments and prescribed payments relating to your family’s essential needs.
  • Other exempt property defined by the province or territory in which you live.

Outlined below is a summary of the Provincial Exempt Assets.


Exempt Assets (assets you can keep) during a Personal Bankruptcy in each Canadian Provinces and Territories


Alberta – Exempt Property
Statute: Read the Civil Enforcement Act.

  • RRSP, RDSP, RESP – Exempt
  • Life Insurance: Exempt with designated beneficiary either Spouse, child, grandchild, parent
  • Food for a 12 month period.
  • Clothing up to $4,000
  • Household furniture 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 share if you are a co-owner
  • Tools of your trade up to $10,000
  • Farm land where your principal source of income is farming, up to 160 acres
  • Farm property requirements for 12 months operations
  • Social allowance, handicap benefit or a widow’s pension if the benefits are not intermingled with other funds
  • Health aids


British Columbia – Exempt Property
Statute: Read the Court Order Enforcement Act and Regulations.

  • RRSP – exempt except for last 12 months of contributions 
  • RDSP – exempt
  • RESP – not exempt, contribution portion repayable
  • Clothing for yourself & your dependants, no dollar limit
  • Household goods up to $4,000
  • One motor vehicle up to $5,000 (or $2,000 if you behind on child support payments).
  • Tools of your trade up to $10,000.
  • Principal residence (equity) up to $12,000, or $9,00 outside of GVRD
  • Medical aids


Manitoba – Exempt Property
Statutes: Read the Executions Act and the Judgments Act.

  • RRSP - Any Registered Plan under Federal ITA -All (Registered Retirement Savings Protection Act)
  • RDSP - Exempt, except contributions made in last 12 months
  • RESP- Not Exempt
  • Life Insurance - Exempt if beneficiary is spouse, child, grandchild and parent. *If person to whom exemptions apply dies the exemptions apply if the property is handed to a dependent" should be in the Manitoba
  • Food and fuel for six month supply or cash equivalent
  • personal clothing
  • Household furniture and appliances up to $4,500
  • One motor vehicle up to $3,000 where used in employment (no limit for farmers)
  • Health & medical aids
  • Tools of your trade up to $7,500
  • Farm property: buildings and requirements for 12 months operations
  • Principal residence up to $2,500 (see farm land), or $1,500 if you are a co-owner
  • Farm land where you reside or cultivate,  up to 160 acres
  • Items needed for religious services
  • Locked-in pension plans
  • Municipal or school property


New Brunswick – Exempt Property
Statute: Read the Memorials and Executions Act and the Personal Property Security Act.

  • RRSP – exempt except for last 12 months of contributions 
  • RDSP – exempt
  • RESP – not exempt, contribution portion repayable
  • Food and fuel for a three month period
  • Personal clothing
  • Household furniture and appliances: $5,000 
  • One motor vehicle used for employment: $6,500 
  • Tools of your trade: $6,500
  • Farm animals to specified limits, their feed for six months, and seeds to specified limits.
  • Health and medical aids
  • Items needed for religious services
  • Pets
  • Pension plans with some exceptions


Newfoundland & Labrador – Exempt Property
Statute: Read the Judgment Enforcement Act and Regulations and the Personal Property Security Act.

  • Certain Pension Plans and Certain other income
  • Food and fuel for a twelve month period
  • Clothing up to $4,000
  • Household furniture and appliances specific types, up to $4,000
  • One motor vehicle up to $2,000
  • Tools of your trade up to $10,000
  • Farm or fishing or aquaculture property up to $10,000
  • Principal residence: up to $10,000
  • Health and medical aids
  • Pets
  • Personal items of sentimental value up to $500


Nova Scotia – Exempt Property
Statute: Read the Judicature Act and Regulations and the Personal Property Security Act.

  • RRSP, RRIF exempt
  • RESP, not exempt
  • Certain types of pension
  • Food and fuel
  • Personal clothing
  • Household goods up to $6,500, more in some cases
  • One motor vehicle up to $3,000, or up to $6,500 if needed for work
  • Health and medical aids
  • Tools of the trade up to $1,000
  • Seeds and livestock for domestic use


Ontario – Exempt Property
Statute: Read the Executions Act.

  • Updated for 2023 Note amounts will be indexed annually.
  • Household furniture, appliances up to $14,180.
  • $10,783 for principle residence, if equity above that amount, then no exemption allowed.
  • Personal clothing and medical and Dental aids
  • One motor vehicle up to $7,117
  • Tools of your trade up to $14,405 
  • In the case of a farmer, livestock, fowl, bees, books, tools and implements and other chattels ordinarily used by the debtor in the debtor’s occupation up to $31,379 for livestock, fowl, bees, books, tools and implements and other chattel.
  • Most pension plans, life insurance policies, and certain RRSPs


Prince Edward Island – Exempt Property
Statute: Read the Judgment and Execution Act and the Personal Property Security Act.

  • Food, fuel, household furniture, appliances up to $2,000
  • Personal clothing
  • One motor vehicle (needed for occupation) up to $6,500
  • Tools of your trade up to $2,000
  • Health and medical aids
  • Seed for up to 100 acres, other up to $5,000
  • RRSPs with beneficiary a family member: no dollar limit


Quebec – Exempt Property
Statute: Read the Code of Civil Procedure.

  • RRSP, RRIF, exempt except for contributions 12 months before a bankruptcy
  • Pension income (certain types)
  • Personal clothing
  • Household furniture and appliances up to $6,000
  • Motor vehicle, Tools of the Trade, Farm Property, Disability Aids
  • Accident benefits
  • Principal residence equity value up to $10,000
  • Support received through court order, donation, or bequest
  • Most property declared exempt by a donor or will
  • Benefits payable and employer contributions under an employer-sponsored pension plan
  • Family papers and portraits, medals and other decorations, and documents
  • Food, lodging, and transportation passes received for employment travel


Saskatchewan – Exempt Property
Statute: Read the Exemptions Act and the Saskatchewan Farm Security Act.

  • Food and fuel cash equivalent of supply until the next harvest
  • Personal clothing
  • Household furniture and appliances up to $4,500 (or $10,000 for a farm)
  • One motor vehicle (needed for occupation)
  • Tools of your trade up to $4,500
  • Livestock and equipment for up to 12 months, two bushels seed per acre of land under cultivation, and enough cash or current crop for farming costs to the next harvest
  • Principal residence equity up to $32,000 (your share) and associated land up to 160 acres
  • All retirement savings plans: RRSPs, RRIFs, and DPSPs
  • Certain life insurance policies


In Summary


Registered Retirement Savings Plans (RRSPs)


Certain provinces provide exemptions for RRSPs in the context of bankruptcy. In provinces without such exemptions, any RRSP contributions made within the preceding 12 months may be withdrawn to satisfy your creditors.


Wages and Salary


Initiating bankruptcy proceedings prevents creditors from garnishing your wages. Nonetheless, if your income exceeds a defined threshold in any given month, you may be required to make surplus income payments throughout the bankruptcy process.


Tax Refunds


Upon filing for bankruptcy, your Licensed Insolvency Trustee will prepare a pre-bankruptcy tax return covering the period from January 1 to the date of filing. Any tax refunds from this period, or refunds owed from prior years where tax returns have not been filed, will be directed to the Licensed Insolvency Trustee for distribution among your creditors.


Lottery Winnings or Inheritances


Should you win the lottery or inherit funds after initiating bankruptcy but before receiving a discharge, these funds must be relinquished to the Licensed Insolvency Trustee, who will allocate them among your creditors. If the amount you receive surpasses your outstanding debts, you may retain the remaining sum once your creditors have been fully satisfied.


Gifts, Property Transfers, or Preferential Treatment


Any gifts or property transfers executed within the year prior to filing for bankruptcy (five years for transactions involving related parties) will undergo scrutiny by your Licensed Insolvency Trustee and may potentially be reversed by the court. Additionally, any payments or preferential treatment granted to your creditors in the three months leading up to the declaration of bankruptcy (or 12 months in the case of related parties) must be reported to your Licensed Insolvency Trustee.



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