What Happens To My Assets In Bankruptcy?

Krieger & Company

What happens to my assets in bankruptcy?

A bankruptcy effectively assigns all your non-exempt assets, to a Trustee for distribution to your creditors. While this immediately creates cause for alarm, most individuals who file an assignment in bankruptcy are largely unaffected by this.

If you have significant non-exempt assets, you may find that a consumer proposal is a better solution to addressing your financial challenges.

Practically, an individual who files an assignment in bankruptcy can keep their car, tools, and personal belongings. In Ontario, these exempt assets include:

  • All necessary clothing
  • A car worth less than $6,600 in wholesale value
  • Tools of the trade worth less than $11,300 and tools for farming worth less than $29,100
  • Household furniture and belongings worth less than $13,150
  • A principle residence with up to $10,000 in equity
  • Contributions made to your RRSP or RRIF, except those made in the last 12 months
  • Many life insurance policies, pensions, and RDSPs
  • Household furniture and belongings worth less than $13,150

We provide more detail on each of these to help you evaluate the impacts of bankruptcy on your assets. Alternatively, a licensed insolvency trustee is free to meet with you to review the impacts of a bankruptcy on your financial situation and your assets. A free consultation with a licensed insolvency trustee is the only way to know for sure how all of your assets will be treated and receive advice regarding your unique circumstances.

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