Savings Bond & RRSP during bankruptcy
I filed for bankruptcy this month. I didn`t have any RRSPs or a Cdn Savings Bond. I now want to start contributing towards an RRSP to pay back the money I took out of RRSPs a few years ago as a first-time home buyer … can I do that?
Also, I want to start saving some money. I registered for payroll (fed. govt) deductions for the upcoming Cdn savings bond but was told by my trustee that this is not allowed because it`s considered investing! Is this correct? Can I open a simple savings account with my bank?
Posted from: Ontario
There is no prohibition against saving or investing during your bankruptcy, BUT any money you set aside or have deducted from your pay will be added back by your trustee when they are determining your money payment (for surplus income).
Another word of warning – if you end up in Court at the end of your bankruptcy because you fail to perform your duties properly, the Court may very well order you to make additional payments to your creditors equal to the monthly amount you were able to save during the bankruptcy. The logic goes something like this, if you can afford to save then you can afford to repay a portion of your debts…