Guaranteed Investment Certificates
Hello – Are you allowed to keep any cash on hand when you file for bankruptcy.
I am thinking about claiming bankruptcy and I have 3 thousand dollars in GICs. I was saving this money for my daughters wedding. Can I gift her that money before I go into bankrupcy. If not, can I spend that money on household expenses (groceries, car repairs) before I go into bankruptcy because I have maxed out everywhere else. Thanks so much.
The short answer is NO. You may be able to keep cash in your chequing account if it is immediately required to pay your basic living expenses (rent, food, etc), but you are not likely to be permitted to keep your GICs to pay for your daughter’s wedding.
A word of warning – if you simply cash out the GICs, pay for the wedding and then file bankruptcy you may be required to pay into your bankruptcy the value of the GICs that you cashed out. In other words, you cannot simply spend the money or give it away – it should either go to cover your basic living expenses or it should be used to pay down your debts.
This may sound harsh, but you have to remember that you “borrowed” money when you used your credit cards and to the extent that you are able, that money should be repaid.