Allowable Bankruptcy Exemptions in Ontario

What Exemptions are Allowed in an Ontario Bankruptcy?

Different Canadian jurisdictions offer different exemptions to bankruptcy.

In the province of Ontario, there are some which are not exempt which, unfortunately, includes your home equity.

The good news, however, is that provided your situation meets the necessary criteria, there are some items in your possession which can be exempt from being seized.

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These tend towards:


  • Clothing: This no-limit exemption means that, regardless of value, your clothes in your possession remain yours throughout the bankruptcy proceedings.


  • Trade tools: While farming equipment falls under a different category, general tools for employment are exempt from seizure up to the amount of $11,300. The amount is considered by fair market value while also considering depreciation.


There are several other exemption considerations including:


  • Vehicles: Provided you own your vehicle, and it is worth over $6600, you must pay the amount of value over that amount (if you wish to keep the automobile)


  • RRSPs: Though exempt from being seized, when you declare bankruptcy, the RRSP payments made over the preceding 12 months are subject to seizure. All other aspects of it remain in your possession and are not eligible for distribution to creditors.


  • RRIFs: The same as with RRSPs, amounts paid for the previous 12 months are subject to seizure, though the remaining amounts cannot be seized and distributed to creditors.


The best way to get a full picture understanding of the fate of your assets and exemptions is to discuss your situation with a Licensed Insolvency Trustee.

They can help you understand the specifics as they apply to your personal scenario.

Using this knowledge, you can make the most responsible financial decision possible while retaining the maximum amount of assets in your possession.

Reach out to a LIT for a confidential meeting to gain valuable, objective advice on your situation.

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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