What assets cannot be seized in bankruptcies in Ontario?

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In Ontario, during bankruptcy, you can keep essential assets safe. Think of it as your “bankruptcy survival kit.” Your clothes, household items, and vehicle (if under $6,600) are protected. Trade tools and farming equipment are covered up to specific amounts. RRSPs and RESPs also have protections.

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Question

What assets cannot be seized in bankruptcies in Ontario? I’m wondering what types of assets are protected and cannot be taken away during a bankruptcy in Ontario.

From: Anonymous Question, Saskatoon, Saskatchewan (SK)
Topic: Personal Bankruptcy

Debt Insiders Answer

In Ontario, there are certain assets that you can keep safe even if you’re going through bankruptcy. Think of it like your bankruptcy survival kit. First up, your personal clothes and those of your dependents are off-limits, so no worries about losing your favorite jeans! Then, there’s your household stuff – furniture and appliances – which are protected up to a value of about $13,150 to $14,180. Your trusty vehicle that helps you get around? It’s safe too, as long as it’s valued under $6,600.

For those in the trades, your work tools and equipment are secure up to $11,300. If you’re into farming, and it’s your sole gig, your farming tools and materials are protected up to $29,100. Health-wise, any necessary medical aids for disabilities are also safe. Plus, if your home’s equity is $10,000 or less, you don’t need to worry. As for your future and your kids’ future, RRSPs and RESPs are covered, with a few conditions to keep in mind. So, while bankruptcy might feel overwhelming, there’s peace of mind knowing that these essential items are here to stay.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

In Ontario, under the Bankruptcy and Insolvency Act (RSC 1985, c 1 (3rd Supp)), certain assets are protected from being seized during bankruptcy. These include:

1. Essential household items (such as furniture and appliances) as outlined in section 67(1)(b).
2. Tools of the trade and equipment necessary for the individual’s occupation or profession, subject to a maximum value (section 67(1)(c)).
3. A vehicle that is necessary for work, also subject to a value limit (section 67(1)(d)).
4. Certain pension plans and accounts that are exempt under specific regulations (section 67(1)(e)).
5. Social assistance and disability payments (Regulations C.R.C., c. 369, section 6).

These protections ensure that individuals retain fundamental assets necessary for day-to-day living and work.

From: OSB Helper

Related Questions

Here are the top 5 most frequently asked questions related to the assets that cannot be seized in bankruptcies in Ontario, along with brief answers:

1. What clothing items are exempt from seizure in a bankruptcy in Ontario?

All necessary clothing for the debtor and their dependents, with no dollar limit.

2. Can I keep my household furnishings and appliances in a bankruptcy in Ontario?

Yes, household furnishings and appliances up to a liquidation value of $13,150 to $14,180.

3. Is my vehicle protected from seizure in a bankruptcy in Ontario?

Yes, one motor vehicle up to a liquidation value of $6,600 to $7,117.

4. Are my tools and equipment used for work exempt from seizure in a bankruptcy in Ontario?

Yes, tools and other personal property used to earn income up to a value of $11,300 to $14,405.

5. Is my principal residence protected from seizure in a bankruptcy in Ontario?

Yes, if the equity in the property is $10,000 to $10,783 or less.

Note: The specific dollar values may vary slightly depending on the source, but these questions reflect the most common concerns and are based on current Ontario legislation.

If you have a question about debt see our debt questions or ask your own debt related question.

References

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