2026-06-05
What is surplus income, and how does surplus income affect me during a Bankruptcy?
Do you understand the role surplus income plays during a Bankruptcy? Learn more about what surplus income is and how it can impact the Bankruptcy process.
Filing for bankruptcy in B.C.? Here’s what’s protected
2025-11-06
2 minute read
Bankruptcy often sounds like a worst-case scenario. You may imagine losing your car, your home, and everything you own. However, in reality, the process is built to help you get a fresh start — not leave you with nothing.
If you’re considering bankruptcy in British Columbia, it’s important to understand what assets are protected by law. These are called exempt assets, and they allow you to maintain a basic standard of living while you work toward financial recovery.
What you can usually keep
As of 2025, you are allowed to keep essential clothing, all medical and dental aids, and household furnishings or appliances of reasonable value. You can also keep tools or equipment you need to earn a living, within provincial limits.
If you own a vehicle, you may be able to keep it if the equity is below the current exemption amount. The same goes for your home. Depending on the amount of equity you have and the location of the home, you may not have to give it up.
Registered retirement savings plans (RRSPs) and retirement income funds (RRIFs) are fully protected, except for contributions made in the 12 months before filing. Other registered plans, such as the registered disability savings plan (RDSPs) and registered education savings plan (REPs), may be treated differently depending on your situation.
What if you earn more than the guideline?
The federal government sets an income threshold based on your household size. If your net monthly income exceeds that amount, you may be required to make surplus income payments. These payments help cover part of what you owe.
For example, in 2025, the net monthly limit for a single person $2,666. If your income is higher than that, you may be required to contribute half of the excess. This can also extend your bankruptcy period.
Do most people lose their assets?
Not usually. Most personal bankruptcies in Canada are what trustees refer to as no-asset cases. This means there are no non-exempt assets to sell. If your belongings fall within the exemption limits and you don’t have significant home equity, it’s unlikely you’ll lose anything.
A fresh start with support
The bankruptcy process is designed to help you move forward with your life. You’re allowed to keep what you need to live and work while dealing with your debt. It’s not about losing everything but about creating a path forward.
If you’re thinking about bankruptcy but worried about what you might lose, it helps to speak with a Licensed Insolvency Trustee. Reach out to a Licensed Insolvency Trustee at MNP Ltd for a free, confidential consultation. You’ll be able to ask questions, explore your options, and get clarity on what’s protected. You don’t have to make this decision alone.
