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RESP and my ex’s bankruptcy

My common law partner and I separated. He declared bankruptcy, leaving me with large debts. To restore my credit scores and buy a house for our children, I used our RESP. I withdrew it easily as only one signature was required. I found a bank that would give me a loan to pay off our joint loan. Now, I have been sent a letter by his bankruptcy company that they want half of the RESP. What are my rights? What are my next steps? Thank You

One Response to “RESP and my ex’s bankruptcy”

Doug Stuive, CA | Trustee | CIRP said...

If the RESP was a jointly held asset, in the absence of a separation agreement, it should have been equally split between both parties. The RESP is also an asset that is not exempt from the trustee’s interest in a bankruptcy proceeding. This means that your husband’s creditors are entitled to half of the cash surrender value of the RESP account. Since you withdrew the funds the trustee is now seeking the funds from you on behalf of the creditors. You are within your rights to negotiate with the trustee to reach a settlement agreement. You may wish to write a letter outlining your position and explaining why you felt that you were solely entitled to the funds. You may also seek legal assistance with this negotiation, though depending on the amount of the RESP funds the cost of a lawyer may not be worthwhile.