What can you keep in a Canadian bankruptcy? Exempt property by province
How exempt property works in a Canadian bankruptcy, the BIA RRSP rule, Ontario's 2026 exemption amounts and how other provinces and Quebec differ.
In a Canadian bankruptcy you keep property that is exempt from seizure under your province's law, plus property the Bankruptcy and Insolvency Act itself protects: most notably RRSPs, RRIFs and RDSPs, except contributions made in the 12 months before bankruptcy (BIA s. 67(1)(b.3)). Everything else of value, such as non-exempt equity in a home, a vehicle above the exemption, cash, non-registered investments and tax refunds for the bankruptcy year, goes to the estate. Exemptions vary a lot by province. In Ontario, for example, the amounts in force since 19 December 2025 are $17,091 for household furnishings and appliances, $17,362 for tools of your trade and $8,578 for one motor vehicle (O. Reg. 657/05 under the Execution Act). In a consumer proposal you keep all your assets, but creditors compare your offer with what non-exempt assets would bring in a bankruptcy.
Part of the consumer proposal vs bankruptcy overview. General information, not legal advice.
The federal layer: BIA section 67
Section 67(1) says the property divisible among creditors does not include:
- property you hold in trust for someone else;
- property exempt from execution or seizure under the law of the province where the property is located and where you live;
- GST/HST credit payments and certain prescribed payments for essential needs;
- property in an RRSP, RRIF, RDSP or prescribed plan, other than contributions made in the 12 months before the date of bankruptcy.
Employer pension plans are generally protected by pension legislation. Locked-in accounts usually are too. Life insurance policies with a designated family beneficiary may be exempt under provincial insurance law; ask your trustee.
Illustrative example. Sam has $30,000 in an RRSP, including $4,000 contributed eight months before filing. The $26,000 is protected; the $4,000 contributed in the last 12 months can be claimed by the trustee. A TFSA is not protected by s. 67 and is generally available to the estate.
Ontario: the figures in force
The Execution Act exempts, at the debtor's option, necessary clothing, household furnishings and appliances, tools used to earn income, one motor vehicle and medical or disability aids. The amounts are in O. Reg. 657/05 and were last updated by O. Reg. 393/25, with the consolidation period starting 19 December 2025:
| Ontario exemption | Amount |
|---|---|
| Necessary clothing for you and dependants | No dollar limit |
| Household furnishings and appliances | $17,091 |
| Tools and personal property used to earn income | $17,362 |
| Farm livestock, tools and implements (farmers) | $37,820 |
| One motor vehicle | $8,578 |
| Medical and disability aids | No dollar limit |
| Principal residence equity (Execution Act s. 2(2)) | $12,997 |
Two cautions. First, the exemption is for property up to the amount: if your car is worth $12,000 with no loan, the excess over $8,578 is exposed. Second, the principal residence exemption works differently: under Execution Act s. 2(2)–(3) the home is exempt only if your equity is no more than $12,997; if equity is higher, the home can be seized and sold, and unlike a vehicle (s. 3(2)) the Act does not reserve the exempt amount for you out of the proceeds. The BIA (s. 67(1)(b)) carries provincial exemptions into a bankruptcy, so in practice only very small home equity is protected in Ontario; confirm how your trustee treats it. The Act requires the amounts to be reviewed at five-year intervals with reference to inflation.
Valuing a vehicle with a loan
What matters is your equity: the resale value minus the loan balance. A car worth $20,000 with an $18,000 loan has $2,000 of equity, well under the $8,578 exemption. You keep the car by keeping up the loan payments, or the lender repossesses it.
Other provinces: how they differ
Every province and territory has its own exemptions statute, usually tied to civil enforcement or execution law, and the amounts change by regulation. Rather than list figures we could not confirm for every jurisdiction, here is what to check:
| Province or region | Where exemptions are set | Points to ask the trustee about |
|---|---|---|
| British Columbia | Court Order Enforcement Act and its regulation; Homestead Act | Vehicle and household limits; homestead protection for equity |
| Alberta | Civil Enforcement Act and Civil Enforcement Regulation | Alberta's relatively generous home equity and vehicle exemptions |
| Saskatchewan | The Enforcement of Money Judgments Act | Home equity and vehicle rules; farm property |
| Manitoba | The Judgments Act and related legislation | Household goods, vehicle, home equity |
| Quebec | Code of Civil Procedure | Furniture and necessary items, tools, and the seizable portion of income |
| Atlantic provinces | Each province's judgment enforcement legislation | Generally modest limits; check for recent updates |
| Territories | Territorial exemption laws | Limits and remote-region rules |
Your trustee applies the exemptions of the province where you live and where the property is located. Moving shortly before bankruptcy to take advantage of another province's exemptions can be challenged.
What usually goes to the estate
| Asset | Typical outcome in bankruptcy |
|---|---|
| Home equity above any applicable exemption | Paid to the estate; you may be able to buy it back with a lump sum or monthly payments |
| Second vehicle, recreational vehicles, boats | Usually non-exempt |
| Cash and bank balances beyond what you need for living costs | Estate |
| Non-registered investments, TFSA, crypto | Estate |
| Income tax refund for the bankruptcy year and earlier | Estate |
| Inheritances received before discharge | Estate |
| Recent RRSP contributions (last 12 months) | Estate |
The trustee can let you buy back a non-exempt asset by paying its value to the estate. In a consumer proposal you keep everything, which is often why people with equity choose one; see your home and car.
Transfers before filing
Selling assets cheaply to relatives, or paying back a family member ahead of other creditors in the months before filing, can be reversed by the trustee as a transfer at undervalue or a preference (BIA ss. 95–96). It can also lead to an opposition to your discharge. Tell the trustee about every transfer in the past five years.
Related: assets and income together decide the bankruptcy outcome; see surplus income for 2026 and why a consumer proposal lets you keep everything.
Frequently asked questions
Can I keep my RRSP?
Yes, except contributions made in the 12 months before bankruptcy. Group RRSPs and pensions through your employer may have additional protection.
What happens to my TFSA?
A TFSA is not protected by s. 67 and is generally available to the estate. It counts as an asset in a consumer proposal comparison too.
Is my car safe?
If your equity is within the provincial vehicle exemption and you keep paying any loan, usually yes. Vehicles needed for work may also qualify under the tools exemption in some provinces.
Are exemptions the same in a consumer proposal?
You keep all assets in a proposal. The exemptions matter only because creditors compare your offer with the bankruptcy result.
Sources
- Justice Laws Website — BIA s. 67 (property of the bankrupt) and ss. 95–96
- Ontario e-Laws — Execution Act, R.S.O. 1990, c. E.24, s. 2; O. Reg. 657/05 (Exemptions)
- Office of the Superintendent of Bankruptcy — what happens to your property in bankruptcy
- Éducaloi — Quebec rules on seizure and exempt property
