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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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RRSP and bankruptcy

If I file for bankruptcy which would be for 21 months. I have RRSP’s around 8,000 ALL contributed over 8 years ago. If during the 21 months I have to take some out to pay for an unexpected expense will it affect amount creditors are entitled to given that the RRSP would be exempt and all funds in RRSP were contributed out 8 years ago?

Posted from: Ontario

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One Response to “RRSP and bankruptcy”

A licensed trustee said...

No – your RRSPs are exempt as long as the money remains in your RRSPs. If you attempt to cash them out during a bankruptcy the company holding the funds will forward the withdrawal to your trustee for the benenfit of your creditors.

The reasoning is simple – RRSPs were made exempt so that you’d have the funds for your retirement. If you don’t leave them for your retirement then the money may as well go to your creditors… I am not saying any of this is fair (or unfair for that matter) – I am telling you what will happen.