Do RRSPs offer Creditor Protection In Case Of Bankruptcy?
October 4th, 2009 Posted in Investing, Smart Tips
RRSP Creditor Protection
In the past, insurance investments such as Segregated funds (whether being held in a registered or non-registered account) and registered pension monies were provided creditor protection in case of bankruptcy.
Starting July 7, 2008, Bill C-12, an amendment to the federal Bankruptcy and Insolvency Act, extended the same creditor protection to all registered investments such as RRSPs, RRIFs, DPSPs. RRSPs and other registered investments as mentioned above are now exempt from seizure or claims of creditors in case of bankruptcy. Remember, this exemption may not apply to contributions made within a 12-month period prior to bankruptcy.
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Ten Common Bankruptcy Questions Answered
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3 Responses to “Do RRSPs offer Creditor Protection In Case Of Bankruptcy?”
By Webster Webb on Oct 10, 2009
Re the creditor proofing. RRSP legislation only protects your RRSPs from seizure in Bankruptcy. They are not creditor proof in the case of seeking a judgment where Bankruptcy is not involved. Insurance legislation protects them from seizure by creditors. You do not need to declare bankruptcy to protect your insurance RRSPs (and non registered and TFSA too). This is a very big difference.
By dave on Dec 8, 2009
It appears from your link that Bill C-12 is an ammendment for the protection of children under the criminal code.
By A.D. on Dec 8, 2009
Dave, I appreciate your pointing this out. I have fixed this link now. Thanks.