Question: I have a healthy enough RRSP. I had repeatedly been told it was protected because it was “locked-in” and I could not touch it.
When we asses risk it is these pieces of information we consider. Is my RRSP available to creditors in my bankruptcy? It is locked in until 2015 (or longer). Once someone suggested I put it under an insurance but that seemed overkill.
Is it at risk if I go bankrupt?
Answer: Probably. If an RRSP is “locked-in” as a result of previous employment, where your pension is converted to an RRSP, it generally cannot be seized by the trustee. If there is a life insurance component it also is generally not seizable.
However, if your RRSP is invested in a locked in GIC that doesn’t mature until, say, 2015, the trustee would be able to seize it.
An added twist is that the rules regarding RRSPs will probably change later this year.
Given these complexities, you should gather all applicable RRSP documents and bring them in to your initial consultation with a trustee, who will be able to advise you on whether or not you will lose your RRSP in a bankruptcy.