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What about RESPs ?

Are my RESP contributions for my children safe from creditors ?

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One Response to “What about RESPs ?”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

If you file bankruptcy and have an RESP for your children, because the RESP is not held to be a true trust and is cashable by the plan-holder it is an asset that you will loose.

When a trustee cashes in an RESP, there are usually plan administration fees to pay, and all government contributions are returned to the government, so the money that the trustee receives is generally far less than the value of the RESP if it is not collapsed.

If you are in financial difficulty and have an RESP that you want to protect, there are options. If you file for bankruptcy you may be able to repurchase the RESP from the trustee, or alternatively you could potentially file a consumer proposal and the RESP will not be affected. For further information on what to expect, or if you will be able to protect these types of funds you should contact a licensed trustee in your area for details.