What Do I Lose If I Go Bankrupt in Ontario?

What Can I Keep in an Ontario Bankruptcy?

There are lots of misconceptions surrounding bankruptcy in Ontario.

Primarily, you may fear that you lose everything you own.

The reality is that you can still maintain ownership of some possessions if you file for bankruptcy in Ontario.

Yes, some things will be lost, but that doesn’t mean you’re left with nothing.

To help you understand this, we’ve put together a short guide to Ontario bankruptcy exemptions:

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What is exempt from bankruptcy in Ontario?

Generally, bankruptcy falls under federal law.

This means that many of the rules and regulations surrounding it are the same across the country.

However, each state has its own bankruptcy exemptions.

In Ontario, these exemptions are outlined in the Ontario Execution Act.

The current laws have been in place since 2015 and state that the following exemptions are allowed:


  • All clothing that you own, provided it is essential;


  • Household furnishings and appliances – This only applies to furniture or household appliances that have a total value of up to $13,150. If the value exceeds this, any additional items will be sold or claimed by creditors;


  • One motor vehicle – This can be a car, truck, motorbike, etc. The ruling for this is that your vehicle must be worth less than $6,600. If it is worth more, you either sell the car or pay the difference in value to keep it. E.g. your car is worth $10,000, so you’d have to pay $3,400. Those of you with loans or leases attached to your car will have the value of these things taken away from the total value of the car. This determines the net value;


  • Trade tools – You can keep any equipment that you use to make a living, provided the net value is under $11,300;


  • Some types of life insurance policies;


  • Retirement accounts – This includes RRSP, RRIF, and SPSP savings. However, it doesn’t include any contributions made in the last 12 months.


What happens to your house?

You’ll notice that housing is a glaring omission from the list.

Does this mean you lose your house if you go bankrupt in Ontario?

The answer is yes and no.

It depends on the circumstances, primarily revolving around two factors:


  • The value of your home
  • How much money you have left on your mortgage


If your home equity is under $10,000, you can keep your property.

If it is higher than this, it can be seized and sold to appease your creditors.

Unless you find another way of paying the equity, which is highly unlikely if it exceeds $10,000.

Need help with bankruptcy in Ontario?

Filing for bankruptcy is a complex process that requires the help of a Licensed Insolvency Trustee.

We can help you deal with the entire bankruptcy process and allow you to get a fresh start.

We’ll guide you through all the rules and regulations, ensuring you hold onto as many things as you legally can.

Call us today, or fill in an online evaluation form, to book your consultation.

Canadian Bankruptcies

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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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