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NS Bankruptcy Exemptions.
Assets you keep in a Bankruptcy or a Proposal.
The Nova Scotia government sets the equity in assets that are protected from seizure in a bankruptcy or a proposal.
Equity is the excess that the value of an asset has over any charges or encumbrances against that asset.
For example, if you have household goods worth $10,000 and there is a $6,000 secured debt against them then the equity in the household goods is $4,000. In Nova Scotia the exemption for household goods is $5,000 so in this example you are entitled to the equity of $4,000 and the unsecured creditors cannot take this.
Nova Scotia Bankruptcy Exemptions:
• Necessary wearing apparel, household furnishings and furniture;
• Necessary fuel and food;
• Necessary grain, seeds, cattle, hogs, fowl, sheep and other livestock;
• Necessary medical and health aids;
• Farm equipment, fishing nets, tools and implements used in debtor's chief occupation, not exceeding $1,000;
• Household goods not exceeding $5,000;
• Motor vehicle not exceeding $3,000;
• Motor vehicle if required for work or business not exceeding $6,500.
Effective July 7, 2008 exemptions are in effect for all registered retirement savings plans (RRSP's, RRIF's and DPSP's (Deferred Profit Sharing Plans).
Contributions made in the 12 months prior to the date of bankruptcy will be recovered (clawed back) for the benefit of the bankruptcy estate for RRSPs in provinces without RRSP exemption laws (BC, Alberta, Ontario, NB, and NS);
There will be no upper cap on the amount of RRSPs that can be protected;
There will be no need to set up the RRSPs in a locked in plan to make them eligible for exemption;
The court will have no jurisdiction to extend the one year claw back period period in an appropriate case.
NOTE: Pursuant to the PPSA of NS, A debtor may claim the following items of COLLATERAL to be exempt from seizure BY A SECURED PARTY: