RESP money

My wife and i have recently been laid off work and finding it difficult to find another job making the same kind of money. We have been approved for Employment Insurance but not enough to make ends meet with all debt obligation. We are now conteplating bankruptcy. We have about $50K in debt and we are on rent. We have about 10K in RESP for the children and understand that it would be taken away after bankruptcy. My question is what would happen if we collapsed the RESP before declaring bankruptcy. Would we be required to pay that back? Another question is how long do we have to pay surplus income? Do we continue to pay surplus income after discharge, assuming discharge after 9 months?

Posted from: British Columbia

One Response to “RESP money”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Collapsing the RESP prior to filing bankrutpcy would cause you some significant problems. First you would have to pay back that money into the bankruptcy estate. Second, as you purposely attempted to defeat the rights of your creditors you may be kept in bankruptcy for a longer as a penalty.

As for surplus income, you only pay this until you are discharged. Although, if you have substantial surplus then the discharge may be delayed and the court may require you to pay for an additional period of time.