What are bankruptcy exemptions?
Bankruptcy exemptions are legal protections that let you keep certain assets when you file for personal bankruptcy.
The Bankruptcy and Insolvency Act protects government payments your family depends on, like the Canada Child Benefit. Your province or territory then sets dollar limits on what you can keep in your home, vehicle, household goods and tools of the trade.
Those dollar limits are based on equity, not market value. Equity is what the asset is worth minus what you owe on it. If your car is worth $8,000 but you owe $6,000 on the loan, the equity is $2,000. That $2,000 is what gets measured against your province’s exemption limit.
Source: Bankruptcy and Insolvency Act – Section 67(1)
Which assets does federal law protect?
Some assets are protected in bankruptcy, no matter which province you live in.
RRSPs are protected under BIA Section 67(1)(b.3). The one exception is contributions made in the 12 months before your filing date, which the trustee can claw back. RRIFs and Registered Disability Savings Plans are treated the same.
Employer-sponsored registered pension plans (RPPs) and locked-in retirement accounts (LIRAs) are fully protected.
CPP and OAS income is not seized either, but both count toward the surplus income calculation that determines whether you owe additional monthly payments during bankruptcy.
GST/HST credits are also exempt, except in limited cases to cover unpaid trustee fees. The Canada Child Benefit cannot be assigned to your trustee.
Source: Bankruptcy and Insolvency Act – Section 67(1)(b.1) to (b.3)
What assets are not protected in bankruptcy?
Not all registered accounts are treated the same way.
TFSAs are not exempt from bankruptcy. The full balance must be surrendered to your trustee for distribution to creditors.
RESPs are also non-exempt in most provinces. The subscriber’s contributions and earned interest can be seized, though the government grant portion is generally protected. Alberta is a notable exception where RESPs are exempt.
Non-registered investments, such as stocks, bonds, mutual funds, and GICs, are non-exempt.
Tax refunds for the year you file bankruptcy and any outstanding prior-year refunds go to the trustee.
Inheritances and lottery winnings received before your discharge are also seized. The same applies to second vehicles, vacation properties, rental properties, and luxury items like jewellery, art, and collectibles that exceed your province’s exemption limits.
Source: Bankruptcy and Insolvency Act – Section 67(1)
Can you keep your home?
Bankruptcy exemptions for home equity are set by provincial law. If your equity falls below your province’s threshold, you keep the home. If it exceeds the threshold, the trustee can require you to pay the difference or sell.
The range across provinces is dramatic. Saskatchewan protects up to $50,000 in home equity, while Alberta protects up to $40,000. Ontario’s threshold is $10,783.
British Columbia protects $12,000 in the Capital Region and Metro Vancouver, and $9,000 elsewhere. Manitoba protects only $2,500 for a sole owner and $1,500 for a co-owner.
Some provinces, like Nova Scotia, New Brunswick, and PEI, have no home equity exemption at all.
If your equity in Ontario exceeds $10,783, you lose the entire exemption, not just the excess.
Source: Ontario Regulation 657/05 under the Execution Act (as amended by O. Reg. 758/20)
Can you keep your vehicle?
Bankruptcy exemptions for vehicles let you keep one motor vehicle up to a certain equity value in most provinces. If the equity is zero or negative, the trustee has no claim, but you still have to keep making payments to the secured lender.
Vehicle exemption amounts range from $2,000 in Newfoundland to $10,000 in Saskatchewan. Ontario protects one vehicle up to $7,117 in equity. Alberta and British Columbia each allow $5,000.
In BC, the exemption drops to $2,000 if you owe family or child support. Nova Scotia protects $3,000, or $6,500 if you need the vehicle for work.
If your vehicle equity exceeds the limit, you can pay the trustee the difference to keep it or surrender the vehicle and receive the exempt amount from the sale proceeds.
See the provincial tables below for exact amounts.
What about clothing, furniture, and tools?
Every province protects essential clothing in bankruptcy, and most set no dollar limit on it.
Household furnishings and appliances are also protected, though the caps vary widely. Ontario allows up to $14,180 in household goods, while Alberta and BC each allow $4,000.
Saskatchewan exempts all necessary household furniture and appliances with no fixed dollar limit. Yukon has the lowest threshold at $200. Medical and dental aids are exempt in every province with no dollar cap.
Tools of trade, meaning the equipment, books, computers, and other personal property you need to earn a living, are protected up to provincial limits. Ontario allows $14,405, while Alberta, BC, and Newfoundland each allow $10,000. These exemptions are measured at liquidation value, not replacement cost.
Bankruptcy exemptions by province and territory
Each province and territory sets its own exemption amounts under provincial legislation. The tables below show what you can keep in each jurisdiction. All values represent the maximum equity (resale value minus secured debt) you can hold in each category.
Ontario
Ontario’s exemptions are set by the Execution Act and O. Reg. 657/05 (as amended by O. Reg. 758/20).
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $14,180 |
| Motor vehicle | $7,117 |
| Tools of trade | $14,405 |
| Equity in principal residence | $10,783 (no exemption if equity exceeds this amount) |
| Food | No limit on necessary items |
| Medical and dental aids | No limit |
| RRSPs, RRIFs, DPSPs | Exempt (12-month contribution clawback) |
| Life insurance (with spouse, child, or parent beneficiary) | Exempt |
| Farming tools, livestock, implements | $31,379 |
Alberta
Alberta’s exemptions are set by the Civil Enforcement Act.
| Asset | Exemption limit |
|---|---|
| Clothing | $4,000 |
| Household furnishings and appliances | $4,000 |
| Motor vehicle | $5,000 |
| Tools of trade | $10,000 |
| Equity in principal residence | $40,000 (conditions apply for co-owners) |
| Food and fuel | 12 months supply for debtor and dependants |
| Medical aids | No limit |
| RRSPs, RRIFs, RESPs, RDSPs, certain life insurance | Exempt (with some restrictions) |
| Farming land | 160 acres if principal residence is on the land |
| Farming personal property | All property required for 12 months of operations |
British Columbia
BC’s exemptions are set out in the Court Order Enforcement Act and the Exemption Regulation.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $4,000 |
| Motor vehicle | $5,000 ($2,000 if debtor owes family or child support) |
| Tools of trade | $10,000 (cannot include a work vehicle) |
| Equity in principal residence | $12,000 in Capital Region or Metro Vancouver. $9,000 elsewhere |
| Food | No limit on necessary items |
| Medical and dental aids | No limit |
| RRSPs, RDSPs | Exempt (12-month contribution clawback for RRSPs) |
Saskatchewan
Saskatchewan’s exemptions are set by the Enforcement of Money Judgments Act.
| Asset | Exemption limit |
|---|---|
| Clothing and jewellery | $7,500 |
| Household furnishings and appliances | No limit on necessary items |
| Motor vehicle | $10,000 |
| Tools of trade | No limit on tools required for occupation |
| Equity in principal residence | $50,000 |
| Food | 6 months supply |
| Medical aids | No limit |
| RRSPs, RDSPs, RRIFs, DPSPs, certain life insurance | Exempt (with some restrictions) |
| Farming equipment and property | All livestock and machinery for 12 months. Two bushels of seed per acre. Tools up to $20,000 |
Manitoba
Manitoba’s exemptions are set by the Executions Act and the Judgments Act.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $4,500 |
| Motor vehicle | $3,000 |
| Tools of trade | $7,500 |
| Equity in principal residence | $2,500 sole owner. $1,500 co-owner |
| Food | 6 months supply |
| Medical aids | No limit |
| Religious articles and furniture | Exempt |
| Farming land and equipment | Up to 160 acres. All equipment and animals for 12 months |
Quebec
Quebec’s exemptions are set by the Code of Civil Procedure.
| Asset | Exemption limit |
|---|---|
| Clothing, food, fuel, linens | No limit on necessary items |
| Household furnishings and appliances | $6,000 |
| Motor vehicle | 1 vehicle required for work (no fixed dollar cap) |
| Tools of trade | Tools required for work (no fixed dollar cap) |
| Medical aids | No limit |
| Pets, family papers, portraits, medals | Exempt |
| RRSPs, RDSPs | Exempt (12-month contribution clawback) |
New Brunswick
New Brunswick’s exemptions are set by the Memorials and Executions Act and the Personal Property Security Act.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $5,000 |
| Motor vehicle | $6,500 (if needed for employment or medical reasons) |
| Tools of trade | $6,500 |
| Food and fuel | 3 months supply |
| Medical aids | No limit |
| RRSPs, RDSPs, RRIFs | Exempt (12-month contribution clawback) |
| Farm animals and feed | Specified limits including horses, cows, sheep, hogs, fowl, and 6 months feed |
Nova Scotia
Nova Scotia’s exemptions are set by the Judicature Act, the Personal Property Security Act, and the Insurance Act.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $5,000 |
| Motor vehicle | $3,000, or $6,500 if needed for employment |
| Tools of trade | $7,500 |
| Food | No limit on necessary items |
| Medical aids | No limit |
| Pension plans, RRSPs, RDSPs, RRIFs, DPSPs | Exempt (12-month contribution clawback for RRSPs and RDSPs) |
Newfoundland and Labrador
Newfoundland’s exemptions are set out in the Judgment Enforcement Act and its Regulations.
| Asset | Exemption limit |
|---|---|
| Clothing | $4,000 |
| Household furnishings and appliances | $4,000 |
| Motor vehicle | $2,000 |
| Tools of trade | $10,000 |
| Equity in principal residence | $10,000 |
| Food | 12 months supply |
| Medical aids | No limit |
| RRSPs, RDSPs | Exempt |
| Fishing, farming, aquaculture personal property | $10,000 (if principal occupation) |
Prince Edward Island
PEI’s exemptions are set by various provincial acts.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $2,000 |
| Motor vehicle | $3,000, or $6,500 if needed for employment |
| Tools of trade | $2,000 |
| Food | No limit on necessary items |
| Medical aids | No limit |
| Pension plans, RRSPs, RDSPs, RRIFs | Exempt (RRSPs require a defined beneficiary under provincial law) |
| Farming equipment and livestock | $5,000. Seed for up to 100 acres |
Northwest Territories
NWT exemptions are set by the Exemptions Act.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $5,000 |
| Motor vehicle | $6,000 |
| Tools of trade | $12,000 |
| Hunting tools | $15,000 |
| Equity in principal residence | $50,000 |
| Food and fuel | 12 months supply |
Nunavut
Nunavut’s exemptions are set by the Consolidation of Exemptions Act.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | No limit |
| Hunting tools and tools of trade | No limit |
| Equity in principal residence | $35,000 |
| Food and fuel | 12 months supply |
| Medical and dental aids | No limit |
| Certain pensions and life insurance | Most exempt (restrictions apply) |
Yukon
Yukon’s exemptions are set by the Exemptions Act.
| Asset | Exemption limit |
|---|---|
| Clothing | No limit |
| Household furnishings and appliances | $200 |
| Equity in principal residence | $3,000 |
| Tools of trade, livestock, fowl, bees, books | $600 |
| Food | 12 months supply |
What if your assets exceed the exemption limits?
If your equity exceeds the limit, you can pay the trustee the difference to keep the asset, or let the trustee sell it and receive the exempt portion back. A consumer proposal avoids this entirely. You keep everything and repay a portion of your debts over up to five years.
In 2025, 78.6% of Canadians who filed for insolvency chose a consumer proposal over bankruptcy. If your assets exceed provincial limits, a consumer proposal is often the more practical route.
Source: Office of the Superintendent of Bankruptcy Canada – Insolvency Statistics in Canada, 2025
A Licensed Insolvency Trustee can compare both options based on your situation.
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Frequently asked questions
Do you lose everything when you file for bankruptcy in Canada?
No. Federal and provincial laws protect essential assets such as clothing, household furnishings, one vehicle, tools of trade, and registered retirement savings plans. What you keep depends on the exemption rules in your province.
Are RRSPs protected from creditors in bankruptcy?
Yes. RRSPs are exempt under BIA Section 67(1)(b.3). The only exception is contributions made in the 12 months before you file, which the trustee can claw back.
Can a bankruptcy trustee take your TFSA?
Yes. TFSAs are not exempt. The full balance goes to your trustee for distribution to creditors.
What is the home equity exemption in Ontario?
Ontario’s threshold is $10,783 under O. Reg. 657/05. If your equity exceeds this amount, the entire equity becomes non-exempt, not just the portion above the limit.
Can you keep your car if you go bankrupt in Canada?
In most provinces, yes, up to a certain equity value. Ontario protects one vehicle up to $7,117. Alberta and BC each protect $5,000. If you owe more than the car is worth, the equity is zero, and the vehicle is not at risk.
What happens to an inheritance received during bankruptcy?
Any inheritance received before your discharge goes to the trustee. After discharge, it is yours. The same applies to lottery winnings.
Are pensions and CPP protected in bankruptcy?
Employer-sponsored pension plans and locked-in retirement accounts are fully exempt. CPP and OAS income is not seized, but both count toward the surplus income calculation.
Do bankruptcy exemptions apply to secured debts like a mortgage?
No. Exemptions protect assets from unsecured creditors and the trustee. If you have a mortgage or car loan, the lender can still repossess the asset if you stop making payments.
Is a consumer proposal better than bankruptcy if you have significant assets?
A consumer proposal lets you keep all your assets while repaying a portion of your unsecured debts over up to five years. If your assets exceed provincial exemption limits, a consumer proposal is often the smarter option.
How often do provincial bankruptcy exemption amounts change?
It varies by province. Ontario’s Execution Act allows CPI-based adjustments every five years. The last update was O. Reg. 758/20, effective 2020.