Chapter 11 and Chapter 13 Bankruptcy in Ontario?
There appears to be some confusion about filing for bankruptcy in Ontario.
Occasionally people ask us about Chapter 11 and Chapter 13 bankruptcies. These ‘chapters’ are part of the United States bankruptcy laws and have nothing to do with an Ontario resident filing for bankruptcy in Ontario over Canadian debt.
Given the international nature of the internet and many books, it is not surprising that there is some confusion.
Ontario Bankruptcy Laws
Here in the Toronto area, we are governed by two main pieces of legislation – the Bankruptcy and Insolvency Act (BIA), which is a federal law for all of Canada – and the Ontario Execution Act, which is a provincial law.
While some assets, such as most RRSPs and RRIFs are exempted from bankruptcy in the BIA – in Ontario, the majority of asset exemptions are set in the Ontario Execution Act and include such things as:
- No limit on clothing
- Up to $13,150.00 of items such as furniture and appliances
- Up to $11,300 of tools that are used to earn income
- Up to $6,600.00 of equity in one automobile
- Special exemptions for farmers
Other Provincial Bankruptcy Laws
All of the provinces of Canada have their own bankruptcy exemption laws – and the amounts that are exempt can vary greatly.
For example, in Alberta, up to $40,000 of equity in the prime residence is exempt from bankruptcy – while here in Ontario, no equity in the prime residence is exempt from bankruptcy.
Obviously, it is essential that you deal with a bankruptcy trustee that is licensed in your province – and is available to meet with you in your area – to make sure you are getting all the facts that apply to you.
If you live in the Toronto area and are contemplating bankruptcy, you are welcome to call David Sklar & Associates, Licensed Insolvency Trustee to book a free consultation. We will review your finances in detail and discuss all of your options for getting out of debt and getting on with your life.