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RESPs and bankruptcy

Can my kid’s RESP be seized by creditors if I declare bankruptcy?

One Response to “RESPs and bankruptcy”

A licensed trustee said...

The short answer is “yes”. Depending on theamount of money involved most trustees will allow you to “repurhcase” the RESP from your bankruptyc estate, rather than cash it out.

If it is cashed out, the government grants must be repaid and often their are penalties and service charges that may also be deducted.

To buy it back, your trustee determines what the “net” amount (after the government is repaid and the fees are deducted) the RESP is worth and then you pay an amount equal to that value in order to keep the RESP.

I should warn you, the payments t buy the RESP back will be inaddition to whatever other payments yu are already required to make.