INSOLVENCY ARTICLES
If I file for a proposal or bankruptcy, do I lose all of my assets?
The
answer is no. Every province in Canada outlines the assets you are
entitled to keep. These are called exemptions. There are also
federal exemptions that apply in every province. Exemptions are only
available to individuals, not incorporated businesses.
In Alberta, the Civil Enforcement Act outlines your exemptions. Generally, you are allowed to keep:
- Necessary clothing for you and your dependents not exceeding $4,000
- Furniture and appliances that are necessities and not exceeding $4,000
- Personal motor vehicle not exceeding $5,000 in equity
- Principal residence with equity less than $40,000 per household
- If you require assets to earn your living, property not exceeding $10,000 in value is exempt
- Certain specific exemptions allowed for farmers
Other exemptions include:
- Child/Tax Benefit cheques
- Certain GST cheques
- Certain pensions, RRSPs, life insurance policies
If
your residence has less than $40,000 in equity, you may keep your home
when you file for bankruptcy, but it is still subject to continuing on
with the mortgage payments. If your property exceeds the allowed
exemptions, you should consult a Trustee for your options.
Income
tax refunds are not an exempt asset and are generally turned over to
the Trustee. If you have any questions about how your assets may be
affected in a bankruptcy or a proposal, you may wish
contact a Trustee
to seek professional advice.
Contact Information
Donna Carson, CGA, CIRP, Trustee is a Senior Vice President with Meyers Norris Penny Limited in Calgary, AB.
For more information, please call Donna at 403.538.3187. Consultation calls and meetings are free and confidential.
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