Ontario Flag Ontario Bankruptcy Exemptions
Assets you keep in a Bankruptcy or a Proposal.

 

By law, you are entitled to keep up to $34,000 of equity in specified assets, in addition to certain pensions plans and insurance policies.

Bankruptcy exemptions, or the assets a debtor is allowed to keep in a bankruptcy or a proposal, were established as part of the philosophy that an honest but unfortunate debtor deserves a fresh financial start. It is recognized that in order to promote a fresh financial start the debtor has to maintain a degree of dignity and be allowed to keep some equity in key assets so he and his family have a starting point from which to rebuild their financial lives.

Residents of Ontario are entitled to keep up to $34,000 of equity in specified assets, in addition to certain pensions plans and insurance policies.

Equity is the excess that the value of an asset has over any charges or encumbrances against that asset.

For example, if you have a car worth $10,000 and there is a $6,000 secured debt against it then the equity in the car is $4,000. In Ontario the exemption for a car is $5,650 so in this example you are entitled to the equity of $4,000 and the unsecured creditors cannot take this.

Ontario Flag

  • Clothing 

$ 5,650.00

  • Household Goods

    $11,300.00

  • Tools of the Trade

$11,300.00

  • Farmers

$28,300.00

  • Motor Vehicle

$  5,650.00




 

 

 

 

 


  • Effective July 7, 2008 exemptions are in effect for all registered retirement savings plans (RRSP's, RRIF's and DPSP's (Deferred Profit Sharing Plans).
    • Contributions made in the 12 months prior to the date of bankruptcy will be recovered (clawed back) for the benefit of the bankruptcy estate for RRSPs in provinces without RRSP exemption laws (BC, Alberta, Ontario, NB, and NS);
    • There will be no upper cap on the amount of RRSPs that can be protected;
    • There will be no need to set up the RRSPs in a locked in plan to make them eligible for exemption;
    • The court will have no jurisdiction to extend the one year claw back period period in an appropriate case.




 

 

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