The Bankruptcy and Insolvency Act allows each province to set their own exemption limits and what the residents of each province can keep if they go bankrupt.
What you get to keep and what a person loses in bankruptcy depends on what you have and where you live. Alberta has one of the best bankruptcy exemption limits in the country, and the assets you get to keep are set forth as follows:
• Necessary clothing and personal effects to a liquidation value of $4,000;
• Household furnishings and appliances to a liquidation value of $4,000;
• One car or a truck to a maximum value or equity* of $5,000;
• $40,000 equity* in your principal residence or, if you have joint ownership, your share thereof;
• Tools of trade or property used by a debtor to earn his or her principle source of income to a maximum value of $10,000;
• Medical and Dental Aids;
• Certain Life Insurance policies;
• Some pensions, RRSP’s and RESP’s;
• Other special exemptions for farmers.
* Equity is the value of the asset less any amounts owed against it.