One of the biggest worries people have when they file bankruptcy is whether or not they’ll lose everything they own. Luckily, Canadian bankruptcy laws allow you to keep many of your belongings. These are known as exemptions, and each province has its own list. In Manitoba, bankruptcy exemptions allow you to keep a number of possessions after you file.
Manitoba Bankruptcy Exemptions
One thing to keep in mind as you consider filing bankruptcy is that bankruptcy is not a punishment. Bankruptcy exemptions are designed to give you the necessities you and your family need. Only your Licensed Insolvency Trustee can tell you for certain which of your possessions you’ll get to keep. This list of exemptions can give you a general idea:
- Furniture, household furnishings, appliances: up to $4,500
- Automobile: one up to $3,000 in equity
- Food/fuel: enough for a six-month supply for your family, or the cash equivalent
- Home: up to $2500 in equity
- Tools of the trade (this can be anything you need to practice your profession, such as tools, books, or computer programs): up to $7,500
Items you can keep that don’t have a monetary limit include:
- Necessary and reasonable clothing for you and your family (keep in mind if you have $20,000 worth of designer clothes and purses, you most likely won’t be able to keep them)
- Health aids for you or your family members, including wheelchairs, hearing aids, prosthetics, and so forth
- Items, including clothing and furniture, needed to perform religious worship
- RRSPs, RRIFs, and Deferred Profit Sharing Plans (DPSPs)
For the most part, exemptions are based not on the actual item, but on its value. When you list your assets, you’ll also give a general estimate of how much you think the item is worth. The value of items depreciate over time, so you may end up with more than you expected. You and your trustee will go over the list together to make sure you agree.
When it comes to your home and vehicles, the limits are based on the amount of equity. For example, if you have a car worth $15,000 and you still owe $12000 on it, you’ll likely be able to keep the car because it falls under the $3,000 equity allowance.
What to Do Next
If you’re considering filing bankruptcy but aren’t sure, your first step is to contact a licensed insolvency trustee if you haven’t already. Your trustee will be able to tell you for sure what you will be able to keep and what you’ll have to surrender if you file. And if there are options available to you other than bankruptcy, the trustee will discuss those with you as well.
Filing bankruptcy can give you a fresh start by eliminating your stressful, unsecure debt. In Manitoba, bankruptcy exemptions make it so you don’t have to lose everything when you start over.
If you need more information on bankruptcy exemptions, contact LCTaylor for an appointment with one of our Licenced Insolvency Trustees.