Loan for RRSP secured debt?
December 2nd, 2008 by Questions
I have taken a loan through my credit union for $20,000 to deposit into an RRSP. The loan is over a 5 yr period. If I file for personal bankruptcy, does the credit union have the right to withdraw the money from the RRSP to retrieve the money they loaned. I am aware that RRSP`s are assets and would be withdrawn to distribute to creditors, I am just wanting to know what would occur in the situation of the outstanding loan.
Posted from: Ontario
One Response to “Loan for RRSP secured debt?”
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December 04, 2008 at 10:01 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
Firstly, as of July 7, 2007, all RRSP’s are considered exempt except for contributions made in the last 12 months. So you may not necessarily loose all the RRSP’s. As for the RRSP loan, Under the Bank Act it is not possible to pledge an RRSP as security, so technically the bank shouldn’t have access to the funds, if it goes anywhere it is most likely the monies would go into the trustee for general benefit of your creditors.