Will a locked-in RRSP survive bankruptcy?

August 25th, 2005 by Questions

I am a creditor. I am owed money by someone who has a locked in RRSP and is threateneing bankruptcy. Does this mean my debt can be wiped out by the bankruptcy and he can subsequently discharged and have his RRSp in tact?

Questions

One Response to “Will a locked-in RRSP survive bankruptcy?”



August 26, 2005 at 11:24 am, Barton Goth, GCO Inc. Bankruptcy Trustees said:

Yes it does. The way the legislation works is that as long as the contributions haven’t happened in the year prior to bankruptcy or the funds have not been transfered from a non-exempt investment into this locked-in investment in the last year, then if the debtor files a bankrutpcy and you are an unsecured creditor, the net effect is he would be cleared from any leagal obligation to pay this debt and you would be required to write this off as a bad debt expense.

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