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Home News The Debt Doctor

The Debt Doctor: Will I Lose All of My Household Goods and Personal Effects?

John Thompson for local2 sault ste. marie
August 1st, 2012 at 8:57am



This article is a column or editorial.
The opinions expressed here are solely those of the author and do not necessarily reflect those of LOCAL2.

DEBT DOCTORA lot of rumors exist regarding what happens to an individual’s household goods and personal effects when they declare bankruptcy. As with most rumors, a lot of misinformation exists resulting in poor decision making and increased stress levels.

The Bankruptcy and Insolvency Act is the law that sets bankruptcy laws in Canada. The Bankruptcy and Insolvency Act is a federal law that is the same across Canada. Property rules, however, are governed by each province. As a result the laws dealing with household goods and personal effects, which are included in the definition of property, vary by the province. The laws of the province where the individual declaring bankruptcy lives determine what happens to that person’s property on declaring bankruptcy.

The Act in Ontario that sets the rules around household goods and personal effects is the Ontario Executions Act. This Act in conjunction with the Bankruptcy and Insolvency Act allows an individual declaring bankruptcy in Ontario to keep household goods valued up to $11,300 as well as personal effects valued up to $5,650.

The “value” is based on the current value of the assets and not new or replacement value. So when determining value think “used” value. For example, consider what the furniture would sell for at a garage sale. This is a good indication of “used” value. The exemption amounts usually cover a typical individual’s personal belongs including their furniture, appliances, electronics, clothing and other personal effects based on the “used” value.

Alternatives exist when asset values exceed exemption levels. Bankruptcy may not be the best solution for you. For example, a Consumer Proposal allows individuals to make a settlement with those they owe money to and keep their assets.

If you are uncertain about how your property will be treated and wish to have a personalized evaluation of your situation please contact us. BDO offers a free consultation that will review your situation, explain options available and provide a full analysis of the pros and cons of each option available. Make an informed decision based on facts and not rumors. Email us today at ssm@bdodebthelp.ca to set up a free consultation. Also please email your questions and I will provide you with a personalized response.

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