November 1st, 2005 by Questions
I owe under $25,000 – should I file for Bankruptcy or write to my creditors for help. I have $6,000 in rrsp’s – should I take them out to lower my debt load before I file?
November 02, 2005 at 2:25 pm, Barton Goth, GCO Inc. Bankruptcy Trustees said:
Sometimes filing a bankruptcy becomes a question of cash flow. If you have insufficient funds to pay your debts and living expenses and you are unable to reduce you current cost of living then you may find yourself in a position where the only things you may be able to afford to do would be a bankruptcy (or perhaps a consumer proposal).
In terms of the RRSPâ€™s, if all you need is a little bit of time to get back on your feet then utilizing the RRSPâ€™s would be a good strategy. However, if it is simply going to be a temporary situation and you know that you will be right back in the same position once the RRSPâ€™s have been used than you are better to not touch these funds and see a trustee (see Find A Trustee on the right hand side of this page) as improper use of these funds may complicate the filing of a bankruptcy or a proposal.
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