Bankruptcy Exemptions in the Province of Ontario

Ontario - Exemptions Act

What do I lose if I go bankrupt in Ontario?

Although bankruptcy is governed by federal law, if you go bankrupt in Ontario what you are allowed to keep is legislated by the Ontario Execution Act. The bankruptcy exemptions (what you are allowed to keep) include:

	$5,650 worth of personal possessions (clothing, jewelry, sports equipment, etc.);
	$5,650 worth of motor vehicles (cars, trucks, etc.);
	$11,300 worth of furnishings;
	$11,300 worth of tools of the trade (equipment that you use to earn a living); and
	Certain types of life insurance.

Legally, everything else that you own is seized by the trustee and sold to repay your creditors. Practically, if you own an item that is not on this list, you should consult an Ontario Bankruptcy Trustee to determine whether or not you will lose any other possessions.

Will I lose my house?

Whether or not you will lose your house depends on the value of your house, and the amount owing on your mortgage. If you own a house with no mortgage and you go bankrupt in Ontario, you will either lose your house, or you must pay into your bankruptcy estate the value of your house. Most people that declare bankruptcy in Ontario and own a house will have a mortgage on the house. In that case you are required to pay the equity in your house if you go bankrupt. (Equity is the difference between the value of the house and the amount owing on the mortgage). This is a complicated area of bankruptcy law, so we suggest you contact a trustee for more information.

Will I lose my car?

If you go bankrupt in Ontario you are allowed to keep one motor vehicle worth less than $5,650. If your car is worth more than $5,650, you are required to pay the amount over $5,650 to the trustee if you want to keep your car. If your car is leased or has a loan registered against it, the loan amount is subtracted from the value of the car to determine the net value. This is also a complicated area of Ontario bankruptcy law, so again we suggest you contact a trustee for more information.

What do I do now?

If you are experiencing money problems, we recommend that you call a licensed trustee in bankruptcy to arrange for a personal consultation. All Ontario trustees listed on this site offer this service free of charge. Contact a trustee today for your free initial consultation.