On July 7, 2008, the government brought into force some amendments to the Bankruptcy and Insolvency Act dealing with registered retirement savings plans (RRSPs). If you have RRSPs and are considering bankruptcy you need to know the following information:Prior to July 7, 2008, unless your RRSP was locked in or otherwise exempt, you lost it when you filed for bankruptcy in Guelph.

As of July 7, 2008 all of those rules still apply, but now you can keep ALL RRSPs when you file bankruptcy in Guelph, except for any money you contributed in the 12 months prior to filing bankruptcy.

This means if you have money that was deposited into your RRSP more than 12 months prior to filing for bankruptcy, that money will now remain yours if you file for bankruptcy.

A word of caution, if you have funds in an RRSP, file for bankruptcy and try to withdraw those funds during your bankruptcy, the RRSP loses its exempt status and instead of the funds being paid to you, they will be seized by your trustee. The idea is to force you to keep the money on deposit for your retirement…

If you filed for bankruptcy prior to July 7, 2008 then the new rules do not apply. Sorry, but any RRSPs you may have that are not exempt under the old rules will be seized by your trustee.

If you have questions about your situation and how your retirement funds may be affected if you file bankruptcy or a consumer proposal please give me a call. We can discuss your situation over the phone or book you an appointment with me or one of our other professionals to review your options in person.

Share this: