What is Exempt from Bankruptcy in Ontario

a man filing for bankruptcy looking stressed

One of the biggest concerns people have when filing for bankruptcy is what assets will be taken away.

Though people are looking to start fresh, they also need their vehicle and be able to earn a living to support themselves. Bankruptcy is not punitive. It gives you protection from creditors and a chance to get out of debt.

Consumers have several protections when they face insolvency. There are some exemptions to the assets you must hand over. This allows you to keep property that the government deems necessary.

While avoiding bankruptcy may be your goal, you can relieve some anxiety by knowing you can keep some of your assets if you choose to go down that path.

What’s the Difference Between Exempt and Non-exempt Assets?couple who filed for bankruptcy looking at the list of non-exempt assets

In Ontario, certain assets can be exempt from seizure or judgment proof.

Creditors seek judgment from a judge to seize your assets and claim the money you owe. Exempt assets are any property or items that are unable to be claimed by creditors to satisfy the borrower’s debts.

The bankruptcy law exists to help people get back on their feet, rather than help them fall deeper into debt. All the tools needed for living and working are exempt.

Non-exempt assets, on the other hand, are property that will likely be taken away and sold by your trustee to pay off your debt to the creditors. Valuable artwork, stocks in an unprotected account, and a second home/vehicle are typically non-exempt items.

Which Assets Are Exempt From Bankruptcy?

Exemptions will always protect the same amount of property no matter the chapter filed.

Some personal and essential belongings are secured against insolvency proceedings, allowing individuals looking for debt-relieving solutions to get the help they need without having to give up their necessities.

Exempt assets typically include:


  • Household furnishings and appliances up to a certain liquidation value
  • All necessary clothing
  • Personal vehicle not exceeding the set limit
  • Tools used to make a livinginsolvency trustee working with couple to manage their debt relief plan
  • Medical aids and devices
  • A principal residence whose equity doesn’t exceed $10,000
  • Certain farm property


Each Canadian province has its own set of regulations regarding exempt and non-exempt assets. However, they still have to abide by the guidelines placed by the federal government.

Get the Debt Relief You Need

Dreaming of living a debt-free life? Fulfilling that dream is closer than you think.

One of the biggest misconceptions about filing for bankruptcy is that you’re stripped of all your possessions and assets, which is entirely false.

Whether you’re not eligible for a consumer proposal or have had your proposal denied, we will find a solution. Lazard & Associates are here to help you rebuild your life debt-free and will be by your side every step of the journey.

Reach out to us to learn more about how we can help you get back on your feet.