To explain Alberta bankruptcy exemptions consider this scenario – You have a car that is worth $5,000 which has a $3,000 secured lien owed on the car, the car has equity of $2,000. In Alberta the exemption for a car is $5,000 and so in this scenario you are able to keep the $2,000 of equity in the car and if you go bankrupt you will be able to keep the equity in the vehicle.
The Alberta Bankruptcy Exemptions are:
- Food required by the debtor and his/her dependants during the next 12 months;
- Necessary clothing of the debtor and his/her dependants up to a value of $4,000;
- Household furniture and appliances up to a value of $4,000;
- One motor vehicle not exceeding a value of $5,000.00;
- Medical and dental aids required by the debtor and his/her dependants;
- Where the debtor is a bona fide farmer and whose principal source of livelihood is farming 160 acres if the debtor’s principal residence is located on that 160 acres and that the 160 acres is part of the debtor’s farm;
- The equity in the debtor’s principal residence, including a mobile home, up to a value of $40,000.00;
- If the debtor is a co-owner of the residence, the amount of the exemption is reduced to an amount that is proportionate to the debtor’s ownership interest;
- Personal property (i.e. tools, equipment, books) required by the debtor to earn income from the debtor’s occupation up to a value of $10,000;
- Where the debtor’s primary income is from farming operations, personal property required by the debtor for the proper and efficient conduct of the debtor’s farming operations for the next 12 months.
- Registered Retirement Savings Plans RRSPs, Registered Retirement Income Funds (RRIFs), Registered Disability Savings Plans (RDSP), Deferred Profit Sharing Plans (DPSPs) and Registered Education Saving Plans (RESP’s).
NOTE:This went into force in Alberta on October 1, 2009.