BC Bankruptcy Exemptions – Assets your Creditors Cannot Seize in a Bankruptcy or a Proposal.
By law, you are entitled to keep up to $31,000 of equity in specified assets.
These exemptions are applicable to all seizures not just in a bankruptcy or proposal context.
Equity is the residual value of an asset once any liens or charges against the asset are considered.
Example of how the exemptions are applied: You have a car worth $40,000 and there is a $36,000 secured debt against it. The equity in the vehicle is $4,000. The exemption in BC for a motorvehicle is $5,000 and because the equity in the vehicle is less than this exemption level, you would be able to keep your car.
The Bankruptcy Exemptions in BC are:
The home exemption in Greater Vancouver / Victoria for your principal residence is $12,000 of equity; in the rest of the province the exemption is $9,000;
$4,000 Household items equity;
$5,000 of equity in a motor vehicle. This vehicle exemption will drop to $2,000 in the case of the debtor being behind on child care payments (to facilitate the enforcement of Maintenance Orders);
$10,000 of equity in work tools;
Essential clothing and medical aids = unlimited;
All registered retirement savings 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 rolled back for the benefit of the bankruptcy estate.