Occasionally, a person has assets in more than one province. As Trustees we then have to determine which assets are exempt, and which are not. The general rule is that, in order for an asset to be exempt it has to be exempt in BOTH the province in which the bankruptcy has been filed, and the province in which the asset is located.
For example, let us suppose an individual lives in Saskatchewan in an apartment that they have rented because they are working there, but owns a house in Manitoba in which they normally live and which they intend to be their principal residence (and in which their spouse and children still reside). The individual files bankruptcy in Saskatchewan because they are there most of the time and currently reside there.
The question then is what, if any, equity in the house (the value greater than the mortgage) is exempt in a bankruptcy.
Saskatchewan law says equity in the principal residence up to $32,000 is exempt (per person).
However, Manitoba law says that only $2,500 of equity is exempt.
Accordingly, in this case, the individual would only be entitled to the lower exemption because the asset is located in Manitoba. (And, if there was substantial equity in that province, the individual might have considered a proposal instead of a bankruptcy).
This can be a somewhat difficult issue, give the wide variations in exemptions between provinces and, as always, we would encourage you to consult with one of our insolvency professionals.
Ian Schofield
MNP Regina
306-790-7904
