What Assets Can Prince Edward Island Residents Keep In Bankruptcy?
Updated: March 1, 2022
Each province in Canada has legislation that protects certain assets from seizure by your creditors unless you have pledged those assets as security for a specific debt.
For individuals living in the province of Prince Edward Island, these exemptions are controlled by the Judgment and Execution Act and the Personal Property Security Act.
Assets exempt from seizure under execution, by an unsecured creditor or judgment creditors in Prince Edward Island include, but not limited to the following:
Furniture and household goods up to a maximum value of $5,000;
Food, clothing, and fuel for the debtor and his family;
RRSP’s are exempt (no limit) provided they have a defined beneficiary which is a spouse, child, grandchild or parent;
One motor vehicle per debtor up to a maximum value of $6,500, subject to the rights of a secured creditor, if the vehicle is required by the debtor to earn a living and no alternate means of transportation are available; or a motor vehicle not exceeding $3,000, if not required for employment;
Health and medical aids;
Livestock, fowl, agricultural machinery and equipment ordinarily used by the debtor in his farm operation, not exceeding $5,000 in value, and sufficient seed to seed all his land under cultivation not exceeding 100 acres;
Tools of the trade, equipment, and books up to a value of $2,000;
If all or a portion of the asset is not exempt, you will generally have the option of keeping the asset by repurchasing it from the bankruptcy estate.
For example – if you have a vehicle worth $9,500 that does not have a loan against it, you could keep this vehicle; however, you would need to pay the bankruptcy estate $3,000. Since the vehicle is worth $9,500 and the exemption is only $6,500, there is $3,000 in value that is not exempt that the Trustee must collect.
When you file personal bankruptcy, all of your assets are transferred to the Trustee to be liquidated for the benefit of your unsecured creditors, except those assets which are exempt from seizure by provincial or federal legislation, examples of which are listed above.
Your Trustee must recover any assets that have equity above and beyond what is owed against them.
You will note that there is no exemption for any real estate (House / Land). If you own real estate worth more than the mortgages registered against it, the Trustee must collect this excess value. Check out our article discussing whether you will lose your house if you go bankrupt.
There is also no exemption for Registered Education Savings Plans (“RESP”).
If you are keeping an asset that has a loan against it, you need to continue making the loan payments to keep the asset.
Every province has their own list of exemptions. You can find Nova Scotia’s bankruptcy exemptions here.
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