What You Can Keep After Filing for Bankruptcy
If you have a high amount of debt and are seriously struggling with your finances, filing for bankruptcy could be the solution for you.
A powerful remedy that eliminates a variety of types of debt, there are several reasons (other than high debt) that people opt to go through the process.
Not only does it stop any wage garnishments, but harassment from creditors.
When you’re considering filing for bankruptcy, one of the first concerns you might have is regarding what assets you can keep and what you’ll have to give up.
It’s often thought that when you declare yourself bankrupt, you’ll lose everything.
But this is a myth that we want to dispel.
As part of the process of filing for personal bankruptcy in Canada, it’s highly likely that you will have to give some of your assets to your Licensed Insolvency Trustee.
These assets are then sold, before the money is given to your creditors as part or all of your repayment plan.
However, not all of your assets will be given to them.
While the overall bankruptcy process is governed under the Bankruptcy and Insolvency Act, there are certain exempt assets that are protected under federal and provincial laws instead.
Designed as a way of ensuring that you and your family can start to rebuild your finances, these could include the following:
- RRSP (Registered Retirement Savings Plan).
- Trade tools.
- Your car – especially if it’s financed by a secured loan, if you’re able to keep up with the payments each month.
- Your house.
- Clothing and other household possessions.
- Health aids.
- Personal items.
It’s important to know, however, that the items that are exempt will vary province to province.
As will the limits on the value of them and the laws that outline how much equity you’re allowed to retain.
Although houses can be exempt under provincial law, if the limits are high, then there is a high possibility that you may have to sell your house in order to cover your debt.
However, in particular provinces, you’ll be able to keep a part of your equity that exists on your home when you opt to file for bankruptcy.
To ensure that you have the best understanding of what exemptions exist, along with the law that relates to the location you’re in, it’s a good idea to contact a Licensed Insolvency Trustee as soon as possible.
If you want to keep any assets that are non-exempt under law, you might have the opportunity to.
To do this, you’ll have to pay your Licensed Insolvency Trustee the value of the asset in question.
Alternatively, if you would rather that the asset is used to pay off a portion of your debt, you could surrender it to them so that they could sell it through an external party.
Get in Contact Today
Do you want to find out more about what assets are exempt when you file for bankruptcy?
Then get in contact with one of our partnered Licensed Trustees today by calling (877) 879-4770 or through email.