What You Can Keep In Bankruptcy In Alberta

What You Can Keep In Bankruptcy In Alberta

When an individual declares bankruptcy in Canada, generally speaking they surrender control of their assets to a Licensed Insolvency Trustee, who then distributes the proceeds to creditors. In exchange, the individual receives a discharge from all or most of their debts, allowing them to make a fresh financial start.

In Alberta, as in other Canadian provinces, bankruptcy is governed by the federal Bankruptcy and Insolvency Act. However, there are specific laws that outline assets that individuals can retain during the process. These laws are provincial, so in each province you will get a different answer about what you can keep in bankruptcy. In Alberta, the Civil Enforcement Act and its regulations govern which assets are exempt from seizure in bankruptcy.

Alberta’s laws are some of the most generous in the country, in terms of allowing bankrupt individuals to keep assets to help them in the re-building process. But this isn’t just about generosity – these rules help reduce a bankrupt’s reliance on government and community supports while they work to regain their financial footing. The exemptions set out in the Civil Enforcement Act and its regulations are intended to ensure that individuals can maintain a basic standard of living and continue their lives with dignity. Some of the key exemptions in Alberta bankruptcy include:

  1. Primary Residence: In Alberta, home owners can typically retain up to $40,000 in equity in their primary residence. However, the exemption must be shared between co-owners of jointly-held property.
  2. Personal Effects: Personal belongings, such as clothing, household furniture, and appliances, are exempt from seizure in bankruptcy provided that their forced sale value (as opposed to replacement value or purchase price) is less than $8,000 ($4,000 for clothing, and $4,000 for furniture and appliances).
  3. Tools of the Trade: Individuals who rely on specific tools or equipment to earn a living may be entitled to retain these assets in bankruptcy, at a forced sale value of up to $10,000. This can include a vehicle that is used for work.
  4. Vehicle: Debtors in Alberta may be able to retain a personal vehicle with a value of up to $5,000. If there is a secured loan against the vehicle, only the net equity that you’ve built up is considered in the valuation.
  5. Property in a registered plan: Funds or investments which are held in a registered plan, like an RRSP, RESP, or RDSP, are exempt. However, any payments out of such a plan are not.

This list is not exhaustive, nor is it definitive. All of the above exemptions are subject to specific rules and exceptions. Therefore, you should talk to a Licensed Insolvency Trustee to see which of your assets may be exempt and how this might impact your options for dealing with your debt. In addition, a Licensed Insolvency Trustee can tell you what portion, if any, of your income will have to be turned over while you're in bankruptcy - again this is highly dependent on your specific situation.

If you are dealing with overwhelming debt and are considering selling, transferring or otherwise dealing with your assets, you should seek advice prior to taking these actions, as the actions you take can impact your path out of debt and your ability to re-build.

Bankruptcy can be a lifeline for people who are experiencing significant financial distress. While bankruptcy isn’t always the right option for an individual facing overwhelming debt, when it is, an LIT can assist you with filing the bankruptcy, navigating the process, and starting to re-build.

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the southern Alberta region. We regularly help individuals review their options for dealing with overwhelming debt, and where appropriate we support them through a bankruptcy filing and help them get set up for future success. If you'd like to know what bankruptcy would look like for you, please reach out to us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

Related Blogs

Frequently Asked Questions

Licensed Insolvency Trustees (or LITs) are the only people who can provide bankruptcy or Consumer Proposals as an option for dealing with your debt. They are uniquely qualified to provide these services and give you advice about your debt. For more information, see our blog post: What is a Licensed Insolvency Trustee?

No, a Licensed Insolvency Trustee is an impartial facilitator who communicates with all parties to make sure the process is transparent, and that everyone is following the required rules so that the process is orderly and predictable.

Bankruptcy is a legal way to get some or all (depending on your financial situation) of your debt forgiven when you can't pay it. For more information, see our bankruptcy page or contact us.

Absolutely. A Licensed Insolvency Trustee can talk to you about an array of options, including a Consumer Proposal. There may be some options that are not realistic for you, based on your situation. A Licensed Insolvency Trustee will meet with you and go over the options, helping you figure out which options are realistic for you and which one is the best to deal with your debt. Contact us to book a meeting to find out more.

Not at all. Bankruptcy is one of the services we provide but it is not the best solution for everybody. In fact, more often than not we recommend a solution other than bankruptcy. A Licensed Insolvency Trustee is simply the best resource for reviewing your options, as we are highly trained, regulated by the government and our professional association, and well-versed in a variety of options. Contact us if you'd like to start a conversation about your options.

Often no one finds out unless you tell them. Most bankruptcies do not have to be advertised in the newspaper and, while any bankruptcy filing goes on the public record, someone would have to search for it (and pay a fee) to find that record.

Not likely. Here in Alberta, there are laws that exempt certain assets from seizure by your creditors, and that includes bankruptcy. Depending on your situation, you may not lose any assets at all - many don't. For more information, check out our blog post entitled: What I Wish People Understood About Bankruptcy | Do you lose all of your assets in bankruptcy?

We would be happy to set up a meeting to discuss the extent to which your assets may or may not be exempt in bankruptcy.

Reach out to us. You can make an inquiry directly from our website by clicking here, or you can call or text us at 1-403-899-3890. We will respond quickly, and work with you to find a good time for the meeting.

Nothing. We offer free consultations to anyone looking to review their options for dealing with their debt. If we decide together that one of the services we provide is the right option for you, there will be payments you need to make in connection with that, but that will occur only after you have made a decision and signed the formal documents.

There are several factors which must be considered to determine which options are feasible for you and to select the best one, including:

  • What assets do you own?
  • Who do you owe money to and how much?
  • What sort of income are you bringing in and how predictable is it?
  • What is your family situation?
  • Your personal goals and priorities

Check out our Consumer Proposal and Bankruptcy pages for information about each of these options and their pros and cons. For more indepth information about these and other options, we've provided a plethora of information on our blog

For a fulsome review of your situation and advice about which option is best for your specific circumstances, contact a Licensed Insolvency Trustee for a free no-committment assessment.


With our experience and our caring approach, we will help you find the best option for debt relief based on your unique situation - from advice on talking to your creditors to a consumer proposal or bankruptcy, and everything in between. We are here to lift the burden caused by overwhelming debt. 

Contact us today at 1-403-899-3890‌ for a FREE, no-commitment meeting, and let us guide you to regaining your financial footing.

Or, join our Email List to receive notifications when we post new blogs or have news to share.

Submit Message