[16] Contributions made to Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), and Deferred Profit Sharing Plans (DPSPs) in the twelve months prior to the date of bankruptcy will be recovered for the benefit of the bankruptcy estate [17] in provinces other than British Columbia, Alberta, Ontario, New Brunswick, and Nova Scotia (where they are exempt from seizure under applicable provincial legislation).
Some assets are protected through bankruptcy exemptions that vary depending on which province or territory the person lives in.
Common exempt assets include household furnishings, clothing, food, heating, work tools and a vehicle up to a certain value.
[19][20] In the case of first-time or second-time bankrupts, discharge occurs automatically (provided they have attended counselling sessions arranged by the trustee)[21] as follows: The above does not apply to a bankrupt that has personal income tax debt of $200,000 or more, which represents 75% or more of total unsecured claims.
In this case, a hearing for an application for discharge may not be held before the end of the applicable period below: The following debts are not released on discharge: In the case of student loans, the seven-year period noted above, on application to the court, may be reduced to five years, if the court is satisfied: The purpose of the bankruptcy process is to introduce a legislative mechanism that would provide a fair and peaceful resolution of financial conflict between debtors and creditors, creditors competing among themselves for recovery of their loans and balance public interest in protecting financial security of creditors on one hand and public interest in allowing an insolvent individual to make a fresh start.