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Rasp withdrawals

If you withdraw money from an rrsp during bankruptcy is it considered income and do you have to pay half of it to the trustee?

Posted from: Nova Scotia

One Response to “Rasp withdrawals”

A licensed trustee said...

Funds in an RRSP are protected while they remain in your RRSP (except for the amounts deposited in the 12 months before you file for bankruptcy, which may be seized as soon as you file), BUT if you withdraw protected funds from your RRSP during your bankruptcy they lose their protection and the ENTIRE withdraswal may be seized for the benenfit of your creditors.

If you have already filed for bankruptcy I strongly encourage you to call your trustee BEFORE you try to make a withdrawal – your trustee has likely put your RRSP company on notice that any/all withdrawals made during your bankruptcy are to be paid directly to the trustee.