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RRSP and consumer proposal

My husband and I are considering doing a joint consumer proposal. He makes roughly $70,000 annually, in the last year I have been unable to work outside of our home due to depression but I do odd jobs and have made roughly $8,000 last year.

We have approximately $185,000 (at present) in unsecured joint debt (credit cards and line of credit) and can no longer keep up wth the payments. We have been playing take from Peter to pay Paul for the last year and now Peter has no more to give Paul.

We also have a $86,000 secured line of credit using our house. There is approximately $25,000 equity in our home.

I had started cashing in our RRSPs to pay our creditors but then read in one of the consumer proposal websites that I should not do this. What is your opinion?

There is approximately $25000 still in RRSPs that I could cash in, I have already cashed in $20,000. All this cashing in of RRSPs is going to leave us in a terrible position for 2007 taxes with the additional income.

What should we do?

I would truly appreciate any advice you can give us.

My husband is having a hard time morally with the whole consumer proposal thing but I do not see another alternative.

Thanks in advance.

KB from Ontario

One Response to “RRSP and consumer proposal”

A licensed trustee said...

Before you cash in anymore RRSPs (and make your tax problem bigger) I suggest you book an appointment to speak to a trustee in person.

Websites like this one are designed to provide general information and advice – you are beyond the point where general information will help. You should be speaking directly to a professional about your situation.

The solution that makes the most sense for you will depend on a detailed review of your situation and you can’t get that kind of advice from a quick web-question.