If I File For Bankruptcy In The Yukon Territory, What Happens To My Assets

Thinking about filing for bankruptcy can fill one with fear and uncertainty, it is natural for anyone considering this option to worry about what they will need to give up in order to be debt-free. Many believe they can't afford to file for bankruptcy or that the they will be left in a worse position than they started. This can cause hesitation or avoidance in contacting a Licensed Trustee, but the truth is that hesitating has the potential to cause more stress and will delay the relief and fresh start that can be achieved by making that first call.   

It is important to understand that consumer bankruptcy is intended to be a fair compromise which allows honest debtors to free themselves from insurmountable debts while also providing creditors with at least a portion of the money they are owed. Therefore, a key step in the bankruptcy process involves the debtor liquidating some assets to contribute towards the outstanding value of their debts. With that said, not all assets may be seized. In fact, many will be exempt – meaning the bankrupt individual will be able to keep them during and after the bankruptcy process is complete. Exemptions allow individuals claiming bankruptcy to maintain a reasonable standard of living.

Asset Exemptions in the Yukon Territory

Exemptions differ among the provinces and territories.  In the Yukon Territory, asset exemptions for bankruptcy fall under the Exemptions Act. According to the act, the following personal property, including real estate and other possessions, are "exempt from seizure under any writ of execution":

• Household furniture, utensils, and equipment that are contained in and form part of the permanent home of a debtor not exceeding in value of $200
• The necessary and ordinary wearing apparel of the debtor and the debtor's family
• The food, fuel and other necessaries of life required by the debtor and the debtor's family for the next ensuing 12 months
• Livestock, fowl, bees, books, tools and implements and other chattels necessary to and actually in use by the debtor in the debtor's business, profession or calling to the extent of $600
• The house and buildings occupied by the debtor and the lot on which they are situated to the extent of $3,000
• Certain life insurance policies, pension plans and RRSPs - based upon certain criteria/facts

Equity Above Exempt Amount

The natural question follows, "What if I need a vehicle to get to work?" or, "What if my house has more than $3,000 in equity?" In cases where the available equity in the asset totals more than the exempt amount, the bankrupt individual will need to make arrangements with their Licensed Insolvency Trustee to decide the best course of action. In most cases, there will be some flexibility based on their situation – often resulting in their keeping those items provided some conditions are met.

Some examples of how this could work include:

• Making a lump-sum payment to the trustee that is equal to the equity available to the creditors
• Discussing a payment arrangement with the trustee if monthly payments are possible until the bankrupt individual has paid back an amount equal to the equity available to their creditors
• Having a family member make a lump-sum payment equal to the equity available to the creditors
• Having a family member purchase the asset from and remitting the equity to the trustee
• Filing a consumer proposal instead of filing for bankruptcy

If you're considering filing for bankruptcy but fear losing assets you can't bear to part with, a free confidential consultation with a Licensed Insolvency Trustee may help you better understand your options. Your debt-free future is within reach. Whether bankruptcy, consumer proposal or other alternative, discover the Life-Changing Debt Solution that's right for you.