Exempt & Non-Exempt Assets in Bankruptcy

licensed insolvency trustees listing the exempt and non-exempt assets

The Covid-19 pandemic hit the world with full force, driving many establishments to shut down and causing the unemployment rate to skyrocket.

For many, the word “Bankruptcy” may seem like a scary proposition, especially when you don’t exactly know what it entails. This common misconception is the result of how heavily the media has portrayed bankruptcy as a nightmarish situation to be in.

Filing for bankruptcy, while it may not seem like it, can be a chance to start fresh. Your unpayable debts would be forgiven. In exchange for this forgiveness, creditors will obtain a form of repayment by assessing which of your assets are available for liquidation.

It’s important to note that not all of your assets will be seized. There are certain exemptions in place that are designed to allow you to keep certain assets that the government deems to be reasonable living expenses.

What Are Non-exempt Assets?

Once you file for bankruptcy, your creditors will begin the process of taking over and selling some of your assets to repay the money you owe.

As the name suggests, non-exempt assets are those that will likely be taken away and sold by the licensed bankruptcy trustee handling your case.

licensed insolvency trustee calculating sum of non-exempt assets

Some of the items that are generally considered non-exempt assets are as follows:

  • Valuable artwork, coin collections, and jewellery
  • Stocks, bonds, and investments in a non-protected account
  • A second home or vacation property
  • A second vehicle
  • A tax refund on income up to the date of filing
  • Equity to your home


Each Canadian province has their own set of regulations regarding exempt and nonexempt assets, although they still follow the guidelines placed by the federal government.

When you file for bankruptcy, you’re giving your creditors a chance to recoup their losses by selling your non-exempt assets. Once everything has been paid back and surplus income payments have ended, any remaining funds that you owe will be released.

What Are Exempt Assets?

Contrary to popular belief, you do not lose everything if you file for bankruptcy. Property and items that are typically considered necessities of life are regarded as exempted assets.

Some of the things you’ll be allowed to hold onto are:beautiful home

  • Necessary clothing and apparel
  • Household furniture, food, and equipment
  • Tools required for your job
  • Property exempted by provincial laws
  • Motor vehicle with a value up to a certain limit
  • Pensions


The bankruptcy law exists to help individuals get out of debt and back on their feet, which is why it allows all the tools needed for living and working to be exempted rather than take everything away.

Get A Fresh Start With Lazard and Associates

The thought of filing for bankruptcy can be a scary one, especially if you don’t know where to start.

Declaring bankruptcy doesn’t necessarily mean handing over all your property and assets to creditors, but is instead a suitable solution to get out of debt and begin anew.

Whether you’re filing for bankruptcy due to unemployment or poor use of credit, our experts at Lazard and Associates are here to help. We work hard with our clients to determine the best course of action and guide them through the filing process.

Reach out to us to learn more about how we can help you repair your financial situation.