this refers to assets or properties owned by the debtor that cannot be recovered by creditors (Glossary of Common Bankruptcy Terms)
Property that may be kept by an individual debtor that is not used for distribution to creditors and is free from liability to satisfy a judgment. The bankruptcy code and state laws control the exemptions to which the debtor is entitled.
Examples of exemptions include: up to $18,450 in equity in a personal residence; up to $2,950 equity in an automobile; and certain personal property where the value of each item does not exceed $475 and the cumulative value does not exceed $9,850.(Bernstein's Dictionary of Bankruptcy Terminology)
Under the Court Order Enforcement Act effective May 1, 1998 (in British Columbia), there are certain assets that are exempt from seizure by any execution creditor or by a Trustee in Bankruptcy.
Equity in a house in Vancouver or Victoria = $12,000; In the rest of the province = $9,000;
Equity in a motor vehicle = $5,000; The vehicle exemption drops to $2,000 if the debtor is behind on child care payment (to facilitate the enforcement of Maintenance Orders);
Equity in household items = $4,000;
Clothing/Medical aids = unlimited;
Tools of the Trade = $10,000.
For exemptions in other jurisdictions in Canada click here > Provincial Exemptions (Dictionary of Canadian Bankruptcy Terms)
Exemptions are the lists of the kinds and values of property that is legally beyond the reach of creditors or the bankruptcy trustee. The debtor in bankruptcy keeps the exempt property. What property may be exempted is determined by state and federal statutes, and varies from state to state. (Bankruptcy in Brief)