Under the old rules, if you filed for Ontario bankruptcy, your RRSP in most cases would be seized, and the proceeds distributed to the creditors (unless it was locked in or otherwise exempt).
Effective July 7, 2008, all RRSPs are now exempt from seizure in a bankruptcy, except as noted below.
To prevent abuse, contributions made in the 12 months prior to bankruptcy are not exempt. In other words, if you contribute $100 every month to your RRSP, the last $1,200 you contributed prior to bankruptcy will not be exempt; under the new rules the remainder of your RRSP would be exempt from seizure.
Please note that as of today the specific regulations governing these new rules have not been published, so we expect that more details will become available.
To determine how this will affect you, and whether or not you should wait to file bankruptcy, plase contact our Ontario bankruptcy offices for further information on bankruptcy reform, RRSPs and bankruptcy.
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