A: Creditors are only allowed to take the amount they would get in a court judgement, which is the amount of the debt plus interest. Consequently, if your assets are worth more than what you owe, you can keep the rest. However, if you have a lot of assets, bankruptcy is probably not the best solution to your financial problems.
You can keep exempt property. These exemptions are the same as the ones that apply when a civil enforcement agency seizes your property. The exemptions vary from province to province. In Alberta, the exemptions are a follows:
- household furnishings and appliances up to a value of $4000;
- a vehicle up to value of $5000;
- property that you need to earn a livelihood up to a value of $10,000; and
- equity in your home up to a value of $40,000
- If you own your home in joint names, your share of ownership reduces your exemption (e.g. if you are joint owners with your spouse, your exemption is halved to $20,000)
- If your equity in your home is greater than the exempt amount, you may be required to sell the house even if it is jointly owned.
Secured creditors can seize exempt property if it was a part of the security agreement.
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