Ontario Personal Bankruptcy Blog

Question: hi, I have a managed rrsp to which I have contributed for 20 years. I have a legal judgement against me and am appealing it, but if I lose and I may go bankrupt. Can I protect the RRSP now by making it into an insurance. Thanks

Answer: That is a difficult question. If you file for personal bankruptcy in Ontario you are required to disclose any assets you disposed of in the prior year (and in some cases in the past five years). Therefore if you converted your RRSP to a creditor-protected RRSP, and then went bankrupt, it is possible that your creditors or your trustee would attack the transaction. They probably cannot seize the RRSP, but they may extend your bankruptcy and require you to repay some or all of the value of the RRSP as a condition of your discharge.

There are many other factors to consider, including the value of the RRSP, and whether or not a consumer proposal was a viable option, so we suggest you contact a bankruptcy lawyer, or a bankruptcy trustee, to review your options in detail before deciding on whether or not to attempt to convert the RRSP.

Labels: bankruptcy Ontario, bankruptcy trustee, RRSP

Question: my common law partner wants me to go bankrupt again; we both have our own credit,he is suposed to give me 450. a month to help; he has not been giving me it last time borrowed half back. I do not want to lose my RRSPs.I have 6,000. worth not locked in my income fluctuates approx 16,000. to 18,000. my debt is approx 16,000.I have not been very good with my credit.Could you advise me on what to do.I have jumped into things with him too quick over 30 plus years. Thanks

Answer: I strongly suggest that you mmet with a trustee to review your options. Bankruptcy is an option, but you will lose your RRSPs. Another option is a consumer proposal that will allow you to deal with your debts, and keep your RRSPs.

Labels: bankruptcy, consumer proposal, RRSP