What can I keep when declaring bankruptcy in BC?

Posted on 29 August 2023

Written by Ashvin Sharma

Bankruptcy is a significant form of legal debt relief in Canada. It is a decision an individual may make when faced with overwhelming debt and financial hardship. It is the legal process of assigning any non-exempt assets you might have over to your Licensed Insolvency Trustee in exchange for the clearance of your unsecured debts. It is the best pathway to a fresh financial future, and is the same process in British Columbia as it is in other Canadian provinces. Although bankruptcy means you may need to surrender some of your assets to repay your creditors, do note that you can keep some assets. Contrary to popular belief, bankruptcy does not mean you lose everything. The concept of bankruptcy is to enable you to restart financially, not to take away everything you own which would be deconstructive. In this article, we share which assets you can keep. So, what can I keep when declaring bankruptcy in BC?

How do exemptions work in British Columbia?

When declaring bankruptcy in BC, the law recognizes that some assets are necessary for maintaining a basic standard of living and for getting back on your feet financially. These assets are exempt from being seized by your creditors to go towards the repayment of your debts. Exemptions exist to ensure that individuals have a foundation upon which they can rebuild their lives after bankruptcy.

What can I keep when declaring bankruptcy in BC?

Here are some of the key assets that you can keep when declaring bankruptcy in British Columbia. Do note the thresholds change each year.

Necessary clothing for you or your dependents to ensure you have appropriate attire for daily lifeNo limit
Household furnishings and appliances – this includes items like bedding and kitchen appliancesUp to $4,000
Tools for work, including any equipment and materials required for your occupation or trade so you can continue workingUp to $10,000
A vehicle to equip you with reliable transportationUp to $5,000, unless you are behind on child support payments, in which case the limit is $2,000
Home equityUp to $12,000 if in Greater Vancouver or Victoria; up to $9,000 elsewhere in BC
RRSPs and pensionsNo limit
Some social benefits, including disability benefits and child support paymentsNo limit
Medical and dental aids for you or your dependentsNo limit

Speak to a Licensed Insolvency Trustee

The intricacies and rules around exactly what is and is not exempt during a bankruptcy can get confusing. Bankruptcy laws and exemptions can also change over time. For this reason, when considering bankruptcy it is a good idea to speak to an experienced Licensed Insolvency Trustee beforehand. Licensed Insolvency Trustees are the only professionals in Canada legally able to file all forms of debt relief, so they are excellently placed to offer advice. They can help you to understand the specific exemptions that apply to your unique situation, and guide you through the process while protecting your rights and assets. Unlike other bankruptcy firms, at Spergel, you are assigned your very own Licensed Insolvency Trustee to walk you through the debt relief process from end to end, instead of being passed from person to person.

What if I want to keep all of my assets?

If you are concerned about not being able to keep all of your assets when filing bankruptcy, you may want to consider a bankruptcy alternative instead. If your debts are not substantial, a debt consolidation loan might help you to structure your debt and keep your payments on track. Canada’s most popular form of debt relief is a consumer proposal, which is well worth exploring if you wish to keep your assets. As well as reducing your debts by up to 80%, consumer proposals enable you to keep your home and car. It is the process of suggesting an affordable monthly repayment figure to your creditors with the support of your Licensed Insolvency Trustee. If accepted, you will only be committed to making your manageable monthly payment for a period of up to five years. At Spergel, we have a 99% acceptance rate on any consumer proposals we file, which means you have a 99% chance of having your debts reduced by 80% while keeping your assets.

Declaring bankruptcy in BC doesn’t mean losing everything you own. Exemptions exist to safeguard the essentials and provide you with a foundation for rebuilding your financial life. Understanding ‘what can I keep when declaring bankruptcy in BC’ and seeking professional advice can help you to navigate the bankruptcy process with confidence. Book a free consultation with Spergel to begin assessing your debt relief options today.

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Ashvin Sharma

Ashvin Sharma

Ashvin Sharma is a Chartered Insolvency and Restructuring Professional and LIT (Licensed Insolvency Trustee) overseeing all of Spergel's offices in the Greater Vancouver Area and British Columbia. He is also our resident expert on homeownership debt and health debt. In his spare time, Ashvin loves to play sports, spend time with family and friends, and serves as a volunteer coordinator for "Free-Them", a Canadian organization committed to raising awareness about human trafficking.

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