What can they take during bankruptcies Canada?

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In Canada, bankruptcy means creditors can claim unprotected assets like inheritances or valuable items exceeding exemption limits. While your salary stays safe, some income might be diverted to pay off debts. For details on what can be taken during bankruptcy, explore more about bankruptcy assets.

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Bankruptcy Assets Question

What can they take during bankruptcies Canada? If I declare bankruptcy in Canada, what assets could I lose? Are there any exemptions?

From: Anonymous Question
Location: Coquitlam, British Columbia (BC)
Category: personal bankruptcy

Bankruptcy Assets Answer

In Canada, when you hit a rough patch financially and go bankrupt, creditors have the right to step in and claim anything that isn’t protected by federal or provincial laws. We’re talking about those nice little bonuses like unexpected gifts, inheritances, or any windfalls you stumble upon after starting the bankruptcy process. If you own assets that soar above the exemption limits, such as a car or real estate that isn’t shielded by law, they might be on the table too. Even though your salary is safe from garnishment during this time (thanks to the Bankruptcy and Insolvency Act), some of your income might still be rerouted to help tackle the debt. For the nitty-gritty on what could potentially be taken, check out the detailed rundown on What can they take during bankruptcies Canada?.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

If you declare bankruptcy in Canada, the assets you could lose may include:

1. Property: You may lose non-exempt property, including real estate and personal belongings that are not covered under exemptions set by law.

2. Cash and Bank Accounts: Funds in bank accounts can be seized, subject to any exempt amounts.

3. Investments: Stocks, bonds, and other investments may be sold to repay creditors.

4. Vehicles: Vehicles exceeding a certain value may be liquidated.

Exemptions can vary by province and may include:

• Primary residence, subject to certain conditions (Bankruptcy and Insolvency Act, RSC 1985, c 11, s 67).
• Registered pension plans (s 67(1)(g)).
• Household goods, up to prescribed values (C.R.C., c. 368, s 1).

Consultation of the specific provincial exemptions is recommended for detailed information. For Ontario, the exemptions are detailed in specific regulations, such as the Ontario Regulation 883/20.

From: OSB Helper

Related Questions

Here are the top 5 most frequently asked questions related to what can be taken during bankruptcies in Canada, along with brief answers:

1. Will I lose my house if I file bankruptcy?

• Not likely, unless the equity in your home exceeds the provincial exemption limit[1][3][5].

2. What assets are exempt from seizure in bankruptcy?

• Exempt assets include necessary clothing, household furnishings, personal vehicle (up to a certain value), tools for work, and certain retirement savings like RRSPs and RRIFs[1][3][5].

3. Can I keep my car if I go bankrupt?

• Yes, if the car’s value is below the provincial exemption limit (e.g., $6,600 in Ontario)[1][3][5].

4. Will I lose my RRSPs if I file for bankruptcy?

• No, RRSPs and RRIFs are generally exempt from seizure, except for contributions made in the 12 months preceding the bankruptcy[1][3][5].

5. Can creditors take my household furnishings and appliances?

• No, household furnishings and appliances up to a certain value (e.g., $13,150 in Ontario) are exempt from seizure[1][3][5].

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

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