What Can I Keep When Filing Bankruptcy?

Most Bankrupts Are Able to Keep All of Their Belongings

Perhaps one of the most frequent inquiries relating to bankruptcy, it is important to get a thorough understanding of how bankruptcy actually works, and what you can keep when filing.

In a state of bankruptcy, your assets become the legal property of your representing Licensed Insolvency Trustee.

It is up to them to sell the assets to use to place the funds into their account, held in trust.

The resulting funds are then issued to your creditors, after the trustee receives the according fee for services rendered.

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Exemptions to the Rules

There are, of course, some exceptions to the above.

These include:

  • RRSPS : These retirement savings funds are protected from bankruptcy proceedings, except for any monies contributed in the previous twelve months before you declare. If you’ve made any of these contributions, then your Trustee will contact the account’s institution to have these funds transferred to the trust account. They are then used to pay your creditors according to the above.
  • Protected Assets: The assets protected from bankruptcy vary based on your province. Based around a financial threshold, these assets are usually items essential to your work or according transportation.These include:
  1. Furniture in your home and necessary appliances. The estimated value must fall below $13,150 in the province of Ontario.
  2. Homes if they are your main abode. This assumes that your equity is less than $10,000. If it does go over that threshold, then the home is subject to liquidation in order to pay your creditors.
  3. Clothing provided it does not exceed the province’s financial threshold in terms of value.
  4. Trade tools with a value of as much as $11,300. To enable you to continue gaining funds to pay off the amount owing, the bankruptcy proceedings let you keep materials essential to job performance.
  5. Automobiles valued at as much as $6,600 are eligible for exemption. This ensures your transportation to work and essential services.
  6. Pension funds outside of RRSPs or RRIFs are exempt, along with many life insurance arrangements.


Other exemptions include special considerations for farmers.

Of course, your eligibility for these exemptions depends on the province in which you file.

The best route to understanding what you, personally, can keep, is to speak with your Licensed Insolvency Trustee.

They can detail what you can retain and what must be relinquished, offering advice in an objective, responsible manner.

To learn your options, reach out for assistance 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?

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