Can I Keep My Assets? Manitoba Bankruptcy Exemptions

What Can I keep if I go bankrupt in Manitoba?

While it might sound too good to be true you can keep some of your possessions when you go bankrupt in Manitoba, known as the bankruptcy exemptions.

These assets are called bankruptcy exemptions, because they are exempt from seizure by your Licensed Insolvency Trustee.

Manitoba Bankruptcy Exempt Assets

The Manitoba exemptions apply to the equity in the asset, which is the value of the asset when all liabilities are deducted from the value of the asset. The assets you can keep when going bankrupt in Manitoba are:

• Furniture, household furnishings and appliances not exceeding total value of $4,500;

• One motor vehicle, if necessary for work or transportation to and from work, not exceeding $3,000 in value;

• Actual residence of the bankrupt, equity of $1,500 each if in joint tenancy, or $2,500 if not in joint tenancy;

• Tools, implements, professional books and other necessaries not exceeding a total value of $7,500 used in practice of trade, occupation or profession;

• Necessary and ordinary clothing of the debtor and family;

• Health aids, including wheelchair, air conditioner, elevator, hearing aid, eye glasses, prosthetic or orthopaedic equipment, necessary to debtor or family;

• RRSPs, Registered Retirement Income Funds (RRIFs) and Deferred Profit Sharing Plans (DPSPs);

• Certain life insurance policies;

• Food and fuel necessary to family for period of six months or cash equivalent.

If debtor is a farmer:

• Animals necessary for farming operation for 12 months;

• Farm machinery, dairy utensils and farm equipment necessary for ensuing 12 months;

• 1 motor vehicle required in the use of agricultural operations;

• Any 160 acres of farm land upon which the debtor or his family resides, or which he cultivates or uses for grazing or other purposes, as well as all the buildings thereon;

• Seed sufficient to seed all land of debtor under cultivation.

As you can see you do not lose everything when you file for bankruptcy in Manitoba. 

In fact, most debtors filing for bankruptcy in Manitoba, are able to keep a wide variety of property. 

If you would like to speak with a professional about how the Manitoba bankruptcy exemptions would impact your situation the best thing for you to do is to schedule a time to review your assets with a licensed Manitoba Bankruptcy Trustee

They will be able to advise you what assets you can keep should you file for bankruptcy.

Why are some assets exempt?

Bankruptcy is a process that allows an honest but unfortunate debtor to get a fresh financial start.

However, to achieve the fresh financial start, you need to keep some dignity and some essential assets as a starting point for you and your family to rebuild your financial lives.

These essential assets are your bankruptcy exemptions, and are defined in the law.

What about my bank account?

Your bank account is not an exempt asset in bankruptcy.

However, you should carefully arrange your banking in bankruptcy, to ensure that no inappropriate payments go to your creditors.

You can keep your dignity, but exemptions are complicated

If you file for bankruptcy, you can keep some assets that are essential for you to live your life, provide for your family, and make a living.

Exactly what you can keep depends on your personal circumstances.

Bankruptcy exemption rules are complicated, and change from time to time. Professional advice is essential.

You could keep all your assets (and avoid the matter of exemptions) by filing a consumer proposal – a negotiated settlement between you and your creditors.

Although this option costs more than a bankruptcy, it may help reduce your feelings of guilt.

For more details on bankruptcy exemptions in Manitoba and for answers to your other questions about bankruptcy and consumer proposals, please contact our personal Licensed Insolvency Trustee in your area and arrange for an initial consultation, free of charge.

This federally-licensed professional will examine all the circumstances of your case and advise you on the options available to you.