Bankruptcy Exemptions & Consumer Proposals in British Columbia
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Bankruptcy exemptions in British Columbia
If you owe £1,000 or more in British Columbia, you are able to file for bankruptcy. The federal government allows provinces to set their own exemptions and this means that exempt assets will vary between provinces across Canada.
During the bankruptcy process, you should work with a licensed trustee who is able to negotiate your assets and make sure that your creditors get as much as possible of the debt that you owe. This may mean that personal property is seized to seal the deal.
Governed by the Bankruptcy and Insolvency Act, personal bankruptcy should always be considered a final resort and you should consult your licensed trustee to make sure that you understand all of your options before you file. If you do end up filing for bankruptcy, you can take comfort in the knowledge that there are exempt assets that are protected from creditors.
Harris & Partners is a specialist Licensed Insolvency Trustee with offices based across Canada, providing debt relief solutions to individuals and businesses struggling to manage their debt.
Contact us today for a free consultation with one of our licensed insolvency trustees and we’ll help you get yourself back on track.
How does a consumer proposal work in British Columbia?
A consumer proposal is a form of debt consolidation, allowing people who are struggling to manage their debts to combine debts into a reduced single monthly payment spread over a longer period of time. As a result, a consumer proposal can make repayment more manageable.
The consumer proposal process is a popular alternative to bankruptcy as debt can often be reduced by up to 80% and once your consumer proposal period is up (providing you have made all your proposal payments on time), you will be debt-free and your financial situation will be restored.
If you are based in British Columbia and want to find out more about the process of filing a consumer proposal, get in touch with us today.
Be cautious of companies offering consumer proposals
Some debt relief companies will try to take advantage of vulnerable customers by promising consumer proposals that will help alleviate debt. However, only a licensed trustee can legally set up a consumer proposal and debt relief companies may charge you extortionate prices for their service.
You should never pay anyone for a consumer proposal service unless they are a licensed bankruptcy trustee. By law, only trustees can take on this work and charge for the service.
Make sure you seek a licensed trustee if you are considering filing a consumer proposal. They can outline all of the options available to you and guide you through the process. You can be safe in the knowledge that trustees are federally regulated individuals with your best interests at heart
How can consumer proposals affect my credit?
You should be aware that when you file for a consumer proposal in British Columbia, it will be noted on your credit report and this can hinder opportunities for future loans. However, if you can demonstrate that you are keeping on top of your consumer proposal repayments, this can help rebuild your credit.
British Columbia (BC) bankruptcy exemptions
In British Columbia, the amount of equity in a person’s property will determine whether it can be seized or not, but these amounts vary from region to region. For example, in Victoria or Vancouver, you are allowed $12,000 of equity in your home, whereas you only get $9,000 worth of equity allowance in other areas of the province. If you are in any doubt, your Harris & Partners Trustee will go through this in detail with you.
Other property exemptions in British Columbia include:
- All clothing.
- Household furnishings and appliances valued up to $4,000.
- A motor vehicle valued up to $5,000 – if you are behind with child support payments, this value would be reduced to $2,000
- Tools of your trade valued at up to $10,000.
- Health and medical aids (including health aids for dependents).
- Almost all pension plans and RRSPs (not including contributions made in the previous 12 months).
How can I find out more about bankruptcy exemptions and consumer proposals in British Columbia?
If you want to find out more about provincial bankruptcy exemptions and consumer proposals in British Columbia, please contact your local Licensed Insolvency Trustee for further information.
Frequently asked questions
Can I keep my home?
If your principal residence is based in Victoria or Vancouver, exemptions are higher. Up to $12,000 of home equity will be safe from seizure in comparison to $9,000 in other areas outside of the Capital or Greater Vancouver Regional District.
Will my pension be taken?
The Pension Benefits Standard Act (PBSA) regulates pensions in British Columbia. Retirement funds contributed in the 12 month period prior to filing bankruptcy can be seized by creditors but funds invested before this time are protected. However, they must be reported as a form of monthly income during the bankruptcy period.
The same applies to pension benefits including the CPP and OAS.
Will my savings be taken?
RESPs (Registered Education Saving Plans) are not exempt and can be seized by creditors.
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