Nova Scotia Bankruptcy Exemptions

Assets You Keep in Bankruptcy

The property exempt from seizure in bankruptcy or a consumer proposal applies to the equity that exists in the asset.

Here is an example to explain how the Nova Scotia bankruptcy exemptions work: Consider that you own a vehicle that you require for your employment that is worth $14,000. You owe $8,000 against the vehicle. In this case you own an equity of $6,000 in this car.

In Nova Scotia, a vehicle that is required for work has an exemption of $6,500; therefore, because you have less equity in the automobile than the exemptions you can keep this car.

Your creditors will not be able to take this asset from you.

Nova Scotia Bankruptcy Exemptions:

  • Home = NIL;
  • Necessary wearing apparel, household furnishings and furniture;
  • Necessary fuel and food;
  • Necessary grain, seeds, cattle, hogs, fowl, sheep and other livestock;
  • Necessary medical and health aids;
  • Farm equipment, fishing nets, tools and implements used in debtor’s chief occupation, not exceeding $1,000;
  • Household goods not exceeding $5,000;
  • Motor vehicle not exceeding $3,000;
  • Motor vehicle if required for work or business not exceeding $6,500;
  • Exemptions are in effect for all registered retirement savings plans (RRSP’s, RRIF’s and DPSP’s (Deferred Profit Sharing Plans).

Contributions made in the 12 months prior to the date of bankruptcy will be recovered (clawed back) for the benefit of the bankruptcy estate.

There will be no upper cap on the amount of RRSPs that can be protected;

There will be no need to set up the RRSPs in a locked in plan to make them eligible for exemption;

The court will have no jurisdiction to extend the one year claw back period period in an appropriate case.

NOTE: Pursuant to the PPSA of NS, A debtor may claim the following items of COLLATERAL to be exempt from seizure BY A SECURED PARTY:

1 motor vehicle not exceeding $6,500 IF the motor vehicle is required for work/to retain employment AND IF the secured creditor does not have a PMSI on the asset (in other words, they took collateral on the asset but did not originally advance the funds to the debtor for the purchase of the asset).