RRSPs are exempt from seizure, although contributions made in the 12 months prior to filing for bankruptcy may be available for your creditors.
Registered Education Saving Plans (RESPs) belong to the contributor, and are therefore considered to be the contributor’s assets, not the child’s. The RESP does not officially become the child’s money until they have used it to pay for post-secondary education.
All pensions and pension rollover funds are considered exempt assets in a bankruptcy.
RESPs are not considered exempt assets in Ontario, and therefore RESPs will be calculated as part of your assets if you file for bankruptcy. The RESP will often be liquidated by the trustee for the benefit of your creditors.
Your RESPs may not be cashed out if you buy them back. You can usually pay your trustee the cash value of the RESPs essentially buying them back from the trustee. You would have to ensure you pay the fair market value of the RESP to the trustee, which would be calculated by your RESP holding company.
If it is affordable, buying back REPSs can be preferable to cashing out RESPs as penalties for early withdrawal will be accrued. These penalties limit their cash value. The penalties sometimes mean the money you would receive is as low as 50 percent of their face value.
Consumer proposals are alternatives to bankruptcy. Consumer proposals are legally binding agreements which protect your assets from debt collections. If you are eligible for a consumer proposal, and providing you uphold your payment responsibilities as laid out in the consumer proposal, RRSP’s, RESPs, Pensions, and other assets are protected unless cashing them was part of your accepted offer to the creditors.
If you have questions about these or other assets such as:
or any asset you can think of, and their implications if you file for bankruptcy, feel free to give us a call and we can answer all your questions.
Extremely professional service by Mr. Thatcher and his team. Mr. Thatcher and his team were always available and quick to answer any questions concerning bankruptcy. I would highly recommend this company to anyone that would require his services!
I have worked with Kevin and his office for many years and would recommend his services to anyone who is having financial difficulties. He is very professional and has spent many years helping people get out of tough debt situation.
The staff at Kevin Thatcher & Associates are incredibly understanding, non-judgmental people who honestly advised me of all my options before I chose to go bankrupt. I was surprised at how easily they broke down the process for me step-by-step so I was able to meet all the requirements.
I just wanted to thank everyone at Kevin Thatcher and Associates for their help. I was at wit's end and couldn't cover most of my bills. I was afraid to answer the phone ever as it might be another collector calling! I was so depressed.
I was looking for a bankruptcy firm and was recommended Kevin Thatcher and Associates. I initially spoke with his pleasant and knowledgable staff(Anna) over the phone. I was very impressed by her and her soft approach being in a difficult situation.
Very kind, caring and helpful group at Kevin Thatcher and Associates.
I was in a real bind with a lot of debt from credit cards and payday loans but I met with Kevin and his staff were very understanding of my difficulties paying. I paid for 21 months under these federal income rules, but was way cheaper than if I did nothing.
Staff is extremely kind and knowledgeable! They took a stressful situation and made it more manageable, so thankful for their expertise.