Discharge From Bankruptcy
You are given a discharge from bankruptcy or automatically released from your debts 9 or 21 months after filing for insolvency unless the Superintendent of Bankruptcy or the trustee or creditors raise an objection. This rule applies to first-time bankrupts. If it’s your second time to declare bankruptcy, you will be discharged at 24 to 36 months. If you’re given an automatic discharge, you won’t need to attend any court hearing. You just need to wait for a duplicate of the discharge, which will be sent by the trustee.
You don’t need to surrender assets that are in a registered disability or education savings plan. Payments out of these plans are also exempt from the enforcement process. Refunds of fees out of the education savings plan to help the student in post-secondary education are also exempt. However, refunds or payments out of the education savings plan are not exempt.
Assets in registered plans such as RRSP and DPSP are also exempt from any collection process, but payments from the plans are not exempt. Schedule an appointment with a licensed Red Deer insolvency trustee and learn how these exemptions apply in your case.
Bankruptcy Exemptions in Alberta
The Civil Enforcement Act in Alberta exempts several items from bankruptcy and writ proceedings. These items include the food you and your family or dependents need during the next twelve months, necessary clothing and dental and medical aids for you or your dependents and personal properties used to earn money from your occupation up to a specific value.
If you’re a farmer and you own a land, up to 160 acres of it is exempt. Personal properties necessary to operate the farm for the next twelve months are also exempt from any collection.
The following items are also exempt up to a certain value:
- Household appliances and furnishings
- Principal residence
- One motor vehicle
There are limits to these exemptions, and it’s stated in the Civil Enforcement Regulation. Here’s the maximum value of the exemptions covered in the Civil Enforcement Act.
- Personal properties used to earn money from your occupation – $10,000
- Household appliances and furnishings – $4,000
- Clothing – $4,000
- Motor vehicle – $5,000
- Principal residence – $40,000
In case your asset’s value is greater than the maximum value set for that item, you can surrender that asset to the trustee who will then sell it. Another option you have is to pay the difference in value so that you can keep your asset.
You won’t lose your house either. The exemption for a principal residence is determined through your equity. If your equity is higher than the maximum limit, the insolvency trustee Red Deer professional will help you find a better solution. You won’t be forced to sell your home or foreclose because you declared insolvency. As long as you pay your mortgage, you won’t lose your home.
If you’re the co-owner or joint-owner of a certain property, the exemptions depend partially on the percentage of ownership. Schedule a consultation with us to learn more about the Personal bankruptcy and business bankruptcy exemptions in Alberta.