what to pay off first

February 22nd, 2012 by Questions

I have both a line of credit at 15,000 and a M/C card at 18,000 but have 15, 000 of RRSP’s backing the line of credit. So do i cash in the RRSP’s and take a tax hit to cover the Line of credit and then do a comsumer proposal towrds the M/C card or might they take 7,500 each outright? I just don’t know what to do.

Posted from: British Columbia


One Response to “what to pay off first”

, A licensed trustee said:

First, your RRSPs cannot be legally used as collateral for a line of credit (or loan). If your think they are/were then you may have misunderstood something some one at ther bank told you.

My suggestion is to file a consumer proposal for both debts. That way you’ll get to keep your RRSPs intake (and it sounds like yo were thinking about a proposal anyway).

Use the links on this site to find a trustee in your area so you can discuss your options – I don’t think you should be cashing out your RRSPs if you don’t have to.

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