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Debt Management Plan and RRSP and other Savings/Chequing Accounts

In entering a debt management plan with a credit counsellor, can RRSP’s / GIC’s and chequing/savings accounts be taken by the creditors?

Also, if there is a joint chequing account, can this be seized without asking or does the creditor have to ask the individuals listed on the account?

Posted from: Ontario

One Response to “Debt Management Plan and RRSP and other Savings/Chequing Accounts”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

In a debt management plan the creditors retain all their abilities to seize assets, garnish wages, or freeze bank accounts. The problem is you have no legal protection with a debt management plan as there is no governing legislation, so largely you are simply hoping that all the creditors cooperate.

How does this impact a joint accout, you are correct that the account can be seized.

What I normally suggest is you have to be very careful when investigating a debt management plan. There are very few controls on the debt management industry, and a large number of companies who are not reputable.

In my opinion, contact a trustee (they are licesnsed by the Federal Government and yes I am a trustee so I am biased, but there is a certain amount of protection when dealing with a liscensed professional), discuss the filing of a consumer proposal. This is a legislated option, it does all the things that the debt management companies claim, but you get the added bonuse of having clear rules that are legislated. As well, you have a stay of proceedings that requres all creditors to participate with the proposal. Essentially you have protection that is not afforded through the debt management plan.