Ontario Bankruptcy Exemptions

(Assets you keep in a Bankruptcy or Proposal)

 

Ontario bankruptcy exemptions include up to $34,000 of equity in assets, in addition to certain pension plans and insurance policies.

One of the major tenets of Ontario bankruptcy law is that a person, overwhelmed by debt, deserves the opportunity of a fresh financial start. Part of that fresh start includes leaving the person with enough possessions to maintain dignity and to help that person towards his or her fresh start.

The property exempt from seizure (Ontario Bankruptcy Exemptions) is set by the province of Ontario and applies to the equity in the asset.

Equity is the excess that the value of an asset has over any charges or encumbrances against that asset.

For example, if you have a car worth $7,000 and there is a $2,000 secured debt against it then the equity in the car is $5,000. Ontario bankruptcy exemptions for a car is $5,650 so in this example you are entitled to the equity of $5,000 and the unsecured creditors cannot take this.

Ontario Flag Ontario bankruptcy exemptions are:

Exemptions

Ontario

Personal effects

$5,650

Household furnishings

$11,300

Tools of the trade

$11,300

Automobile

$5,650

Principal residence

$0
  • Effective July 7, 2008 exemptions are in effect for all registered retirementsavings plans (RRSP's, RRIF's and DPSP's (Deferred Profit Sharing Plans).
    • Contributions made in the 12 months prior to the date of bankruptcy will be recovered (clawed back) for the benefit of the bankruptcy estate;
    • There will be no upper cap on the amount of RRSPs that can be protected;
    • There will be no need to set up the RRSPs in a locked in plan to make them eligible for exemption;
    • The court will have no jurisdiction to extend the one year claw back period period in an appropriate case.

Ontario Sales Tax Credit (OSTC).

For 2010, the new sales tax credit will provide annual relief of up to $260 for each adult and child. Ontario residents must apply for the OSTC, along with the goods and services / harmonized sales tax credit when they file their income tax and benefit.

The OSTC is exempt from seizure by the trustee. However, the GST/HST tax credit will be available to the trustee to the amount necessary to cover trustee fees.

 

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