Personal insolvencies reached a 10-year high in Canada in 2019.
If you’re considering filing for bankruptcy, one of the first steps is to meet with a Licensed Insolvency Trustee (LIT).
A LIT will discuss your situation and circumstances with you, and they will ask you to disclose information about all the assets that belong to you.
At this point, you must declare all of your assets, including property, any investments you hold, motor vehicles and household goods.
It is important to note that bringing assets to light will not automatically result in them being seized.
There is a list of exemptions, and if you file for bankruptcy, you won’t suddenly have everything taken from you.
Your trustee will ask you to provide documentation to support the information you present, for example, statements for an RRSP (Registered Retirement Savings Plan).
As well as disclosing all your assets, your trustee will also ask you to share information about all your liabilities and debts, including loans, credit cards and outstanding tax payments.
Why do I have to disclose my assets?
If you’re in a position where you’re filing for bankruptcy, this means that you owe creditors money.
Creditors have a right to access information about your assets at the time of filing for bankruptcy or putting forward a consumer proposal.
In many cases, creditors will already be aware of some or all of your assets because you are asked to provide this data when you apply for credit.
Which assets are exempt when filing for bankruptcy?
Many people assume that bankruptcy means losing everything.
In reality, bankruptcy is a solution, which is designed to help people with mounting debts get back on their feet.
Every region has a list of exemptions in line with the Bankruptcy and Insolvency Act, but they may vary slightly, so it’s important to check the legislation in your area.
In most cases, exemptions include a motor vehicle (up to a certain value), household goods and personal items and tools and equipment required for work purposes.
In some cases, savings plans are also protected.
If you’re unsure which assets you could keep hold of if you choose to file for bankruptcy, why not get in touch with our expert advisors?
We can offer advice based on your situation and help you understand what is going to happen and what you can expect once your bankruptcy is discharged.
It’s crucial to understand that bankruptcy is not designed to kick people while they are down.
In fact, it’s a measure that can help individuals to rebuild and start afresh.
Summary
When filing for bankruptcy, your trustee will ask you to provide details of all your assets.
This does not mean that you will lose all your possessions and investments.
If you need advice, or you have questions about exemptions, don’t hesitate to contact us today.
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?
