WHAT PROPERTY IS CREDITOR PROOF?
That is a more complicated question than it appears to be because in law there are many exceptions. In Ontario, property that is exempt from seizure is defined by the Execution Act. Exemptions may also be found in other statutes and judicial decisions. For clarity you should discuss your specific situation with a knowledgeable professional such as a Trustee in Bankruptcy or an Insolvency Lawyer.
However, here are some general guidelines:
In making an assignment into bankruptcy an individual may claim one vehicle with a value of up to $5,650; furnishings and household goods with a value of up to $11,300; clothing and personal effects with a value of up to $5,650; and tools of the trade with a value of up to $11,300 as being exempt property.
Those values are based on yard sale or auction values – in other words “fair market value” – not replacement costs.
Some other property is also exempt from seizure including RSPs, except contributions made in preceding twelve months; life insurance policies, provided that the beneficiary falls within the designated class; pensions and some other kinds of investment.
In some parts of Canada there are exemptions for a homestead, but not in Ontario. Although many Ontario homeowners find that their house becomes, in effect, exempt because most home owners have little or no equity in their properties. This is especially the case for the majority of people having financial difficulties since they have usually refinanced the property in an attempt to manage or pay down debts.
There are also special exceptions for farmers and fishermen – for more information about what property is creditor proof call the office at 519-646-2222 and arrange a free consultation