Filing Personal Bankruptcy in Ontario

The only distinction between provinces on how filing bankruptcy affects you is with respect to what assets you can keep. In Ontario, the main statutes that govern what assets are exempt from seizure by a trustee in bankruptcy are the Pension Benefits Act, Insurance Act and Executions Act. Below are summaries of the statutes in question.

Pension Benefits Act

  • Money payable under a pension plan is exempt from execution, seizure or attachment.
  • Money transferred from a pension fund to a prescribed retirement savings arrangement or for the purchase of a life annuity is exempt from execution, seizure or attachment.
  • Money payable from a prescribed retirement savings arrangement or from a life annuity is exempt from execution, seizure or attachment.
  • Despite the above, payments under a pension are subject to execution, seizure or attachment in satisfaction of an order for support enforceable in Ontario to a maximum of one-half the money payable.
  • The entitlement of a person, in his or her discretion, to withdraw money from a locked-in retirement account as defined in the regulations shall not be considered when determining, for the purposes of any other Act, the income or assets available to the person.

Insurance Act

  • Where a beneficiary is designated, the insurance money, from the time of the happening of the event upon which the insurance money becomes payable, is not part of the estate of the insured and is not subject to the claims of the creditors of the insured s. 196 (1).
  • While a designation in favour of a spouse, same-sex partner, child, grandchild or parent of a person whose life is insured, or any of them, is in effect, the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure s. 196(2).

Executions Act

The following assets are exempt from execution by creditors or  a trustee in bankruptcy:

  • Household furniture up to $11,300
  • Personal effects up to $5,650
  • Tools of the trade up to $11,300
  • A personal use vehicle valued up to $5,650

This post should not be interpreted as legal advice or a legal opinion. Please consult your Fong and Partners Inc. advisor to review your own particular circumstances.

© Copyright Fong and Partners Inc 2010.

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