Can I Keep My Assets? Halifax Bankruptcy Exemptions
What Can I keep if I go bankrupt in Halifax?
While it might sound too good to be true you can keep some of your possessions when you go bankrupt in Halifax, known as the bankruptcy exemptions.
These assets are called bankruptcy exemptions, because they are exempt from seizure by your Licensed Insolvency Trustee.
Halifax Bankruptcy Exempt Assets
The Nova Scotia exemptions apply to the equity in the asset, which is the value of the asset when all liabilities are deducted from the value of the asset. The assets you can keep when going bankrupt in Nova Scotia are:
Home = NIL
Necessary wearing apparel, household furnishings and furniture;
Necessary fuel and food;
Necessary grain, seeds, cattle, hogs, fowl, sheep and other livestock;
Necessary medical and health aids;
Farm equipment, fishing nets, tools and implements used in debtor’s chief occupation, not exceeding $1,000;
Household goods not exceeding $5,000;
Motor vehicle not exceeding $3,000;
Motor vehicle if required for work or business not exceeding $6,500.
Exemptions are in effect for 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 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.
NOTE: Pursuant to the PPSA of NS, A debtor may claim the following items of COLLATERAL to be exempt from seizure BY A SECURED PARTY:
1 motor vehicle not exceeding $6,500 IF the motor vehicle is required for work/to retain employment AND IF the secured creditor does not have a PMSI on the asset (in other words, they took collateral on the asset but did not originally advance the funds to the debtor for the purchase of the asset).
As you can see you do not lose everything when you file for bankruptcy in Halifax.
In fact, most debtors filing for bankruptcy in Halifax, are able to keep a wide variety of property.
If you would like to speak with a professional about how the Halifax bankruptcy exemptions would impact your situation the best thing for you to do is to schedule a time to review your assets with a licensed Halifax Bankruptcy Trustee.
They will be able to advise you what assets you can keep should you file for bankruptcy.
Why are some assets exempt?
Bankruptcy is a process that allows an honest but unfortunate debtor to get a fresh financial start.
However, to achieve the fresh financial start, you need to keep some dignity and some essential assets as a starting point for you and your family to rebuild your financial lives.
These essential assets are your bankruptcy exemptions, and are defined in the law.
What about my bank account?
Your bank account is not an exempt asset in bankruptcy.
However, you should carefully arrange your banking in bankruptcy, to ensure that no inappropriate payments go to your creditors.
You can keep your dignity, but exemptions are complicated
If you file for bankruptcy, you can keep some assets that are essential for you to live your life, provide for your family, and make a living.
Exactly what you can keep depends on your personal circumstances.
Bankruptcy exemption rules are complicated, and change from time to time. Professional advice is essential.
You could keep all your assets (and avoid the matter of exemptions) by filing a consumer proposal – a negotiated settlement between you and your creditors.
Although this option costs more than a bankruptcy, it may help reduce your feelings of guilt.
For more details on bankruptcy exemptions in Halifax and for answers to your other questions about bankruptcy and consumer proposals, please contact our personal Licensed Insolvency Trustee in your area and arrange for an initial consultation, free of charge.
This federally-licensed professional will examine all the circumstances of your case and advise you on the options available to you.