Most people assume that filing for bankruptcy in Alberta will automatically lose any assets they own, which is not true. According to the Bankruptcy and Insolvency Law, there are some particular assets that can be protected from being seized and it also allows specific items that must be established by provincial legislation.
The civil enforcement law in Alberta specifies what can be kept. According to this law, each debtor is capable of claiming assets such as;
• Appliances and furniture up to a value of $4000
• Necessary food and also for dependents for the next year
• Necessary medical or dental benefits and also for the victim’s dependents
• Equity in a car not to exceed $5000
• Essential clothing for the victim and also for dependents up to a value of $4000
• Individual possessions such as tools, equipment, supplies needed due to employment up to a value of $10,000.
• Equity in the main residence, including a mobile home, up to a value of $40,000. However, if the property is jointly owned, the amount of the exemption is reduced by the part of the ownership interest.
• When the victim is an actual farmer and the main source of income is from farming, they are allowed 160 acres, if the primary residence is situated on those 160 acres and those 160 acres are part of the farm. In this case, the personal belongings that are needed to efficiently execute the agricultural tasks during the next year are saved.
Filing for bankruptcy in Canada can be confusing and immense. The most perplexing element is the people researching online how bankruptcy proceedings contrast with those in the United States. There are quite a few exemptions that are allowed under various federal statutes that you should be aware of when filing for bankruptcy.
In a position where possessions exceed acceptable limits, this does not automatically mean that all assets in question will be lost. It can be arranged for the buyback of the assets to be made directly from the bankruptcy estate, ie the trustee, or instead the bankrupt may want to consider filing a consumer proposal. In a proposal, the victim has the advantage of reduced leverage on their credit and also there is no transfer of assets, no need to arrange any asset buybacks with a trustee.
Going bankrupt is a very intimidating procedure; however, you must realize that it is not the end of your world. Today, anyone going through bankruptcy is actually presented with a fresh start due to Canada’s Bankruptcy and Insolvency Act (BIA) and Alberta’s own bankruptcy rules and regulations. This is the chance victims are given to change the ways they spend and borrow money and do everything right. This is a once in a lifetime opportunity.
This is not to say that filing for bankruptcy is an easy process. The credit score bottoms out again at 0 and one may have to lose some of one’s prized assets, not to mention all the legal work that goes along with it. Perhaps someone has already started filing for bankruptcy or perhaps one has become overloaded with debt and is seeking financial decisions. It is important to meet with a licensed Alberta bankruptcy trustee to learn about your options before filing.