Bankruptcy Exemptions & Consumer Proposals in Ontario

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Filing for bankruptcy in Ontario

As specialist Licensed Insolvency Trustees, we understand that there are many questions surrounding the application for bankruptcy. One of the most common is what you can and can’t keep after the proceedings are done. You should know that, if you file for bankruptcy in Ontario, you are entitled to keep certain items as legislated under the Bankruptcy and Insolvency Act and Ontario federal law. 

For more detailed advice, speak to our Trustees who are fully regulated and qualified to advise you about what you can and cannot keep when you declare bankruptcy in Ontario. They can also advise you on bankruptcy alternatives, such as consumer proposals in Ontario. Harris & Partners have over 50 years of experience providing debt relief solutions to individuals and businesses struggling to manage their debt.

Contact us today for a FREE consultation with one of our expert bankruptcy Trustees and we’ll help you get yourself back on track.

How does a consumer proposal in Ontario work?

Consumer proposals offer a debt relief option that is often seen as an attractive, less severe alternative to bankruptcy. Bankruptcy should always be considered a last resort and consumer proposals offer that for many Ontarians seeking help with their financial situation.

A consumer proposal agreement can allow people to keep control of their assets and pay back far less to their creditors. This works by an Insolvency Trustee acting on your behalf to get your creditors to agree to a reduced payment figure. Once your various creditors have agreed on a monetary value, you’ll make one manageable monthly payment to your Trustee who will distribute it evenly amongst your creditors.

Once a consumer proposal is in place, your creditors will not be able to take any further legal action against you, giving you peace of mind and more disposable income to play with. 

If you are based in Ontario and want to find out more about the process of filing a consumer proposal, get in touch with us today.

Ontario bankruptcy exemptions

Each province has its own bankruptcy exemption rules, but in Ontario, you are legally allowed to keep the following items:

  • All clothing
  • One motor vehicle with a value of up to $6,600
  • Household furniture up to $13,150
  • Business tools up to the value of $11,300
  • Your home, when the equity value in your principal residence is less than $10,000
  • Registered Retirement Savings Plans – apart from payments made in the 12 months leading up to the bankruptcy
  • Most pension plans and some life insurance plans
  • Farmers: Up to $31,379 for livestock, tools etc.

If you want to find out more about filing for bankruptcy in Ontario, personal bankruptcy exemptions or the possibility of applying for a consumer proposal in Ontario, please contact your local Licensed Insolvency Trustee for further information.

Need help with your finances? Speak to H&P

Harris and Partners have a number of offices in the Ontario area, so if you or someone you know needs help with regaining control of your finances then help isn’t too far away. We’ve got over half a century’s worth of experience in advising Canadians about debt consolidation, filing for bankruptcy in Ontario, and consumer proposals in Ontario, so you can trust that we’ll find the debt solution that is best for you.

Speak to your local office today and leave your money worries behind.

Frequently asked questions

How much debt do I need to have before I can apply for bankruptcy in Ontario?

You need to have a minimum of $1,000 of debt in order to be considered for bankruptcy, although, bankruptcy is only usually considered for those with debts totalling much more than this amount. Speak to your Trustee about the best course of action for your unique circumstances.

Do I get to keep my house?

If you file for personal bankruptcy in Ontario, whether or not you lose your home is all dependent on the amount of equity that is attached to it. The Ontario Execution Act states that, in order to keep your home it must not have more than £10,000 of equity. If it does go over that amount, then it may be seized in the bankruptcy process.

Will my car be seized as part of bankruptcy in Ontario?

This is a bit more complicated. You are able to keep one vehicle if it is valued under $6,600. If it’s valued over that, then you will have to pay the excess amount to your Trustee to keep the car. If the car has a lease or a loan on it, the loan will be taken from the car’s value to work out a net value. You may have the option of paying the difference to keep your vehicle if its value is tipping over the threshold, so speak to your Trustee about this.

Do I get to keep my savings for retirement?

All company or government pension plans are protected in Ontario, including RRSPs, RRIFs and DPSPs if you are still a current employee of the company. However, any contributions made in the 12 months prior to filing for bankruptcy are not exempt and can be seized by creditors.

Are my wages exempt when filing for bankruptcy in Ontario?

Your wages will not be affected during bankruptcy. Any wages, bonuses or commissions are all considered to be income and are also exempt.

Will my bank account be affected?

When you file for bankruptcy in Ontario, a bank may be able to take funds from any savings you have to pay towards your debts. However, you can work with your Trustee to make sure that you have enough money to pay for your essential living expenses such as rent and food.

Do I get to keep my work tools and equipment?

Any tools that you currently have that help you to complete work for your occupation – e.g. computers – can be kept if they are valued up to $11,300.

Am I entitled to tax refunds?

No. After filing for bankruptcy, your Licensed Trustee will set up a pre-bankruptcy tax return from January 1st up to the date of filing. Any tax refunds from that period or years prior from taxes that haven’t been filed will be paid to the Trustee and they will then distribute those funds amongst your creditors.

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