April 30th, 2009 by Questions
I am frustrated. My kids were also putting their money in the RESP; Christmas and birthday money. Why do I have to give the RESP up in Bankruptcy?
Posted from: Ontario
May 01, 2009 at 8:00 am, A licensed trustee said:
I suspect you won’t like my answer, but if you were already in debt when you made your RESP contributions then an argument can be made that it was really your creditor’s money that you were using to make those deposits. Its great that you were planning fro your kids future, but you were doing it with other people’s money.
Look at it another way – you want relief from your debt (?) Well the cost of that relief is the surrendering of things like your RESPs . If you don’t feel that is fair then I suggest you shouldn’t file.
Before you get up in arms about this, instead of cashing out your RESPs, you have the right to simply make payments to your trustee in an amount equal to the cash out value of the RESPs. You get to keep the RESPs for your children and your creditors get the value of the RESPs.
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