September 8th, 2009 by Questions

My wife and I are considering bankruptcy. We have about $75,000 in unsecured debt. We together have about $40,000 in RRSP and about $15,000 in RESP. Is the RRSP protected with the new rules? I know that the RESP is not but are we able to switch ownership to like the grandparents so we don`t lose all that money. Thank you.

Posted from: British Columbia


One Response to “RESP”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

As long as you have not invested any money in the RRSP in the last 12 months your investment will be considered exempt and will be yours to keep.

However, the RESP will be lost. Even if you transfer the ownership to your grand parents you will not be able to protect it. In fact you will have complicated matters significantly as you will have committed an offense under the Bankruptcy ans Insolvency Act, meaning not only will a court order be obtained to reverse the transfer in question, but your efforts to defeat the rights of your creditors will result in you not being eligible for an automatic discharge and result in the court having to determine some type of penalty for being involved in such and improper transaction. So the best advice is leave things where they sit, it will make your life much easier in the long run.

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