What Can I Keep If I Claim Bankruptcy In B.C.?

Understanding Bankruptcy Exemptions in British Columbia

Bankruptcy can be a daunting prospect. However, it also offers individuals an opportunity to wipe the slate clean and start afresh financially. In the process of declaring bankruptcy, there are certain assets that you are allowed to retain, known as bankruptcy exemptions. This article will delve into the specifics of What Can I Keep If I Claim Bankruptcy In B.C.?, shedding light on the intricacies of bankruptcy law in British Columbia.

1. The Concept of Bankruptcy

Bankruptcy is a legal proceeding that enables a debtor to eliminate their debts and start anew. When you declare bankruptcy, your assets are surrendered to a bankruptcy trustee who then liquidates them into cash. This cash is then distributed amongst your creditors. However, to facilitate a fresh monetary beginning, you’re allowed to retain some crucial assets. These are termed as your bankruptcy exemptions.

2. The Role of Provincial Legislation

The Bankruptcy and Insolvency Act in Canada acknowledges provincial legislation in regards to the assets of debtors that are immune from seizure by creditors. In British Columbia (B.C.), the Court Order Enforcement Act plays a significant role in defining these exemptions.

3. Personal Property Exemptions

According to the Court Order Enforcement Act, the exemptions for personal property of a debtor in B.C. are as follows:


  • $4,000 for home furnishings and appliances.
  • $5,000 for a single motor vehicle, provided the debtor is not a maintenance debtor.
  • $2,000 for a single motor vehicle, if the debtor is a maintenance debtor.
  • $10,000 for tools and personal property used by the debtor to generate income from their occupation.


These exemptions are valued on a liquidation basis, which is the amount you would receive if you were to sell the property today.

4. Principal Residence Exemption

The Act provides specific exemptions for the principal residence of a debtor:


  • $12,000 if the debtor’s principal residence is within the boundaries of the Capital Regional District or the Greater Vancouver Regional District
  • $9,000 if the debtor’s principal residence is located outside these districts


5. Pension and RRSP Exemptions

The Pension Act protects pensions from seizure in the event of bankruptcy. Similarly, Registered Retirement Savings Plans (RRSPs) are exempt, barring the contributions made in the last 12 months.

6. Life Insurance Exemptions

If a life insurance policy has a named preferred beneficiary, the cash surrender value of the policy is exempt from seizure.

7. Limitations of Exemptions

One crucial factor to consider is that personal property pledged to a creditor as security, such as a car financed by a bank, cannot be claimed as exempt property unless it’s been paid for in full.

8. Complexity of Exemptions

Bankruptcy exemption rules can be quite intricate and subject to change. Hence, it’s essential to seek professional advice to navigate these waters effectively.

9. Alternative to Bankruptcy: Consumer Proposal

A consumer proposal is a negotiated agreement between you and your creditors that allows you to retain all your assets. While this route may be more costly than declaring bankruptcy, it could be a suitable alternative worth discussing with a professional.

10. Conclusion

Filing for bankruptcy in B.C. allows you to retain certain assets that are integral to sustaining your livelihood, supporting your family, and maintaining your profession. The specifics of what you can keep depend on your personal circumstances and the location of your residence. Understanding What Can I Keep If I Claim Bankruptcy In B.C.? requires a thorough grasp of the provincial laws and professional advice.

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