RESP
September 1st, 2009 by Questions
I understand under the new legislation an rrsp will be exempt from seizure. Would a childs RESP (registered in parents name with child as beneficiary) be seized as a result of the parents filing for bankruptcy?
Posted from: Ontario
One Response to “RESP”
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September 02, 2009 at 5:19 am, A licensed trustee said:
Unfortunately, RESPs are NOT exempt under bankruptcy law – if you file for bankruptcy then your trustee is required to realize on any RRSPs that you have.
To “realize” means your trustee has to collect the cash value of the RESP – this can be done by you agreeing to pay to your trustee an amount equal to the cash out value, or it can be done by simply cashing the RESP out. Depending on the value in the fund, you might want to comnsider whether or not you can afford to make the extra payments to keep it.
This is the sort of thing you want to discuss with your trustee BEFORE you decide to file.