Credit Cards and RRSP

August 16th, 2007 by Questions

After an initial first free consultation with a Licensed Insolvency Trustee ; Can you choose to make a decision about cashing or withdrawing your RRSP, if you choose to declare banktuptcy,
without being penalised.

Also after a free consultation can you still use your credit cards before you declare bankruptcy.


One Response to “Credit Cards and RRSP”

, A licensed trustee said:

Here’s the problem – once you’ve spoken to a trustee you’ve admitted that you have some sort of financial problem. To continue to use your credit cards doesn’t sound reasonable if you don’t know how you are going to pay for the purchases.

In other words: you should not continue to use your credit cards (or lines of credit or apply for new credit) once you have been to see a trustee or financial counsellor to discuss proposals or bankruptcy. To do so may constitute FRAUD, which can get you in trouble.

In regards to the RRSP, you really shouldn’t cash it out or switch it around either. IF you do, you will have to provide a detailed accounting and explanation to your trustee and it is likely your trustee will require you to pay an amount equal to your withdrawal before your bankruptcy will end.

Sorry, but if you honestly want to sort out your financial problems then once you’ve been to see a trustee and you know you’ll have to file ether a proposal or bankruptcy then you shouldn’t be increasing your debt or selling off the things that you own – it makes it look like you are being less than honest.

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