Can I Keep My Assets? Quebec Bankruptcy Exemptions
What Can I keep if I go bankrupt in Quebec?
While it might sound too good to be true you can keep some of your possessions when you go bankrupt in Quebec, known as the bankruptcy exemptions.
These assets are called bankruptcy exemptions, because they are exempt from seizure by your Licensed Insolvency Trustee.
Quebec Bankruptcy Exempt Assets
The Quebec 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 under the Quebec Bankruptcy Exemptions when going bankrupt in Quebec are:
The movable property which furnishes his main residence, used by and necessary for the life of the household, up to a market value of $6,000 established by the seizing officer;
The food, fuel, linens and clothing necessary for the life of the household;
The instruments of work needed for the personal exercise of his professional activity;
Family papers and portraits, medals and other decorations;
Property declared by a donor or a testament to be exempt from seizure except in certain cases;
Judicially awarded support and sums given or bequeathed as support;
Benefits payable under a supplemental pension plan to which an employer contributes on behalf of his employees, other amounts declared unseizable by an Act governing such plans and contributions paid or to be paid into such plans;
Periodic disability benefits and expense reimbursements under a contract of accident and sickness insurance;
Property of a person that he requires to compensate for a handicap;
RRSPs, Registered Retirement Income Funds (RRIFs) and Deferred Profit Sharing Plans (DPSPs).
A certain portion of salaries and wages based on the number of dependants.
* Nevertheless, the property referred to in first and third items above may be seized and sold by a creditor holding a hypothec thereon.
As you can see you do not lose everything when you file for bankruptcy in Quebec.
In fact, most debtors filing for bankruptcy in Quebec, are able to keep a wide variety of property.
If you would like to speak with a professional about how the Quebec 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 Quebec 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 Quebec 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.