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RESP’s cash out?

Hello, we need guidance.
We most likely will have to declare bankruptcy. Included in bankruptcy would be our vehicle which we cannot afford to keep. There is no equity in it.
Question is, we need a vehicle for work, can we cash out or RESP to purchase a vehicle for work. That is the only available cash we have to purchase one. It would be around $6000. Can we do that prior to claiming bankruptcy.

We need your advice, thanks

Posted from: Ontario

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One Response to “RESP’s cash out?”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

The problem with this is you are essentially converting a non-exempt asset (meaning one that is lost in a bankruptcy), to an exempt asset. Which is not a good idea as it will reduce the amount of money available for your creditors. What would likely happen is that as part of the bankruptcy you would be required to pay back all the monies that were taken from the RESP.

Having said that it is important to discuss this issue with a local trustee, they will look at your situation in greater detail, and help you to determine what will be the best way to approach this vehicle issue.