When you file for bankruptcy you surrender your possessions or assets to the trustee. The trustee then sells the items and distributes the funds to the people you owe money to, the creditors.
Many assets are exempt from seizure meaning that you are legally able to keep them in a bankruptcy
Assets exempt in bankruptcy:
- personal clothing and effects
- household furniture
- tools of your trade,
- farm equipment, supplies and livestock, up to $29,100
- pensions, for more info on RRSP’s and Pensions see below,
- cars up to a value of $6,600
- leased vehicles where you have kept up the payments
- secured vehicle where payments are being made
Bankruptcy is not meant to knock people down or be punitive. The role of bankruptcy is to help honest debtor’s get out of debt and give you a fresh start financially.