Ontario Bankruptcy Exemptions: Tools Of The Trade

Tools Of The Trade Exemption in Ontario Bankruptcy

Bankruptcy is a means of making a fresh start, but what happens to the assets you own?

In Canada, there are exceptions when it comes to handing assets over to a trustee, including Ontario tools of the trade bankruptcy exemptions.

A brief introduction to Ontario bankruptcy exemptions

Bankruptcy is not designed to punish people, and it can provide a clean slate for those who have struggled with debt.

When you file for bankruptcy, you will surrender some assets to a bankruptcy trustee, but you will not lose everything.

There are exemptions.

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These exceptions have been selected to enable individuals to cover everyday living expenses and to continue working and earning an income.

Bankruptcies in Canada are administered according to the Bankruptcy and Insolvency Act, but provinces are responsible for outlining specific exemptions.

In Ontario, these include:


  • Essential clothing;
  • One vehicle worth up to $6,600;
  • Up to $13,150 worth of household appliances and furniture;
  • Up to $11,300 worth of equipment or ‘tools of the trade’;
  • Some types of life insurance;
  • Savings amassed in the 12-month period leading up to bankruptcy (this includes RRSP, SPSP and RRIF plans).


Tools of the trade exemptions in Ontario

Tools of the trade exemptions in Ontario are designed to enable people who provide their own equipment or tools to continue working.

If you’re a self-employed builder, for example, you’ll need your tools to earn an income.

For most self-employed workers, contractors and traders, tools are the most significant investment.

They cost money to replace and without them, you can’t do your job and earn a wage.

The tools of the trade exemption covers the equipment you need to work.

Examples include:


  • IT equipment for an IT consultant;
  • Power and hand tools for contractors and tradespeople;
  • Equipment used to fix cars for mechanics.


At present, the maximum value for tools of the trade exemption stands at $11,300.

It is essential to note that the value is calculated according to current worth, as the cost of buying new equipment would be much higher.

The sum is determined by considering how much tools of the trade would reach in the open market.

In the vast majority of cases, the ceiling value should enable people to keep hold of all the tools they need to carry on working.

If you are thinking about filing for bankruptcy, learning about exemptions can help to provide peace of mind and reduce stress.

Many people who rely on equipment or tools to do their job may be worried about losing them and then having to find the cash to replace them in the future.

Ontario’s tools of the trade exemptions eliminate this issue.

Seeking advice about bankruptcy

Nobody wants to think about going bankrupt, but anyone can get into debt.

If you can’t pay your bills, you’ve missed payments and your financial situation isn’t going to improve in the near future, it’s crucial to understand that help is available.

There are several ways to get out of debt, and an experienced advisor can go through viable options with you and discuss possible solutions.


In Ontario, there are exemptions in place to help those who have filed for bankruptcy get back on their feet.

If you rely on tools or equipment to do your job, you will not have to part with them.

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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