As an honest but unfortunate debtor, you may choose to use the legal process of bankruptcy, regulated by the Act, to obtain a discharge from your debts (subject to reasonable conditions). Declaring bankruptcy means that your secured creditors cannot take legal steps to recover what you owe them, such as seizing your property or garnisheeing your wages.
If you owe more than $1,000 and have carefully reviewed all your options, declaring bankruptcy may be the right choice to make.
Perhaps the most common question those considering bankruptcy ask is, “Will I lose all my assets?” Happily, the answer is no. There are several exemptions from seizure. They are:
- Household furnishings to a value of $11,300
- Personal effects to a value of $5,650
- Tools of trade to a value of $11,300
- Motor vehicles to a value of $5,650
- Farmers’ business assets to a value of $28,300
- Certain life insurance policies
- Most pensions
- Certain RRSPs
If you’re involved in a close financial relationship, it is possible to file a joint assignment that will be dealt with as one file. Your debts must be substantially the same, and the trustee must believe it is in the best interest of all parties.