Can I keep my TFSA if I go Bankrupt?

Can I keep my TFSA if I go Bankrupt

 TFSA and Bankruptcy

This is a great question and when this question arises, it brings a comparison between TFSA and RRSPs as both are options you may consider for saving. If you happen to be declaring bankruptcy, you will need to disclose all of your assets to the trustee and these include your RRSPs, TFSAs and so on.

Tax free savings accounts have no protection in bankruptcy. Contributions made in the 12 months before filing, may not be protected with RRSPs, but the balance contributed more than 12 months before filing are protected.

With a personal bankruptcy

If you are declaring personal bankruptcy, only certain assets are allowed to be exempted (via the Ontario Execution Act) and this depends on the nature of the assets. The Ontario Execution Act provides an exemption for one vehicle to the extent of $6,600, personal effects (clothing) now has no limit, household items (furniture) to the extent of $13,150 and tools of trade to the extent of $11,300.

When the non-exempt assets have been dispersed to your creditors, and all the circumstances of the bankruptcy are met, you are then legally released from those debts owed to the unsecured creditors. Other issues can come into play such as surplus income for example.

Depending on whether it is your first, second or third time filing for bankruptcy, it can take from 9 months to 36 months to complete and will be on your credit record for 7 years once your bankruptcy has been completed.

When you meet with your Licensed Insolvency Trustee, they will review all your options, and bankruptcy may not be the best choice for you. A consumer proposal could be another option.

With a consumer proposals

With a consumer proposal, if you happen to owe $250,000 or less (mortgage not included), you may qualify for a consumer proposal. With a consumer proposal, you get to keep your assets which includes your TFSA by providing monthly payments in a proposal.

With a consumer proposal, you pay a portion of your unsecured debt over a period of 5 years or less.

Whether you have a TFSA or an RRSP, you should get all the facts with a free consultation at the offices of David Sklar & Associates. There are more options available than just Bankruptcy, and we can help you determine what the best option for you is.

Consumer Proposals with David Sklar & Associates

The unfortunate reality is that many Ontario residents have been thrown into financial instability because of the current health crisis and are now concerned about what to do next. If you need financial help, the licensed insolvency trustees at David Sklar & Associates are here for you. 

We offer over-the-phone consultations and electronic document signing so that you can access our services from the safety of your home. We want to encourage our clients to prioritize their health as best as they can during these uncertain times.

Patience can be rewarding. If you wait to apply for credit after you complete your consumer proposal and rebuild your credit score, you’re going to get better options from lenders. Contact us today so we can walk you through your options. 

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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Ready to live debt free?

I cannot emphasize enough how thankful I am for Jackie Stanley's help with filing for bankruptcy.All of us dread being put in this position and we have a million questions about the process but trust me Jackie makes it so easy for you that you don't have to do anything yourself!She is very kind and friendly and puts you at ease right away. She emphasizes with you and let's you know it's not your fault.Most importantly when you leave that first meeting you will not believe the load that is taken off your shoulders. You can actually feel it!You are a godsend Jackie and I can't thank you enough!!I hope you are highly valued there as much as you are by me!
Sue Murray
18:45 05 Dec 21
Putting together and executing a Consumer Proposal can be daunting, that is unless you work with Cori Naron at David Sklar & Associates Inc. Cori's advice and support has been instrumental over the past five years. Thank you Cori!!
Barry Kuntz
20:37 01 Dec 21
I’m very happy with the services I received for Jackie Stanley who helped me get my finances in order. It was a quick and easy process & all of my questions were answered.
Amanda Frappier
01:18 19 Nov 21
I have had the privilege of being supported by Jackie at David Sklar Associate. She was very helpful, very professional and very friendly. She gave me the help I need. Thank you Jackie for your help.
Alex Taylor
22:03 17 Nov 21
Got my probe solved, great service
arny raposo
17:02 11 Nov 21
Jackie at Daivid Sklar and Associates is such a pleasure to work with. She explained everything in great detail and is always there when I have a question or concern. She really cares about her clients.
Steve Medica
09:33 10 Nov 21
I filed a proposal with another group, which came in as a referral from one of my brokers. My experience went from ok to bad to worse, due to lack of communication and education on the process I was to embark on. I worked with Cori Naron in the past, and I came to her now for help on literally doing the work that the other group should have done. Cori stepped in, educated me, advised on rights, responsibilities, how the process works and what potential outcomes may happen. I do not have enough words of recognition and gratitude for what she did - she alleviated stress, anxiety, dead-end thoughts and she made me live again. Congrats to DSklar for hiring her and retaining such talent.
Giani Kokolakis
18:45 25 Oct 21
Very professional service. Before contacting David Sklar & Associates i contacted bunch of other firms they seemed fishy. After I spoke with Jason Sklar at Hamilton Office I discovered professionalism with hope. I was explained every step of my situation with solution professionally. Thank you David Sklar & Associates.
Wajay Awan
07:29 12 Oct 21
I met David a few months ago and i am glad I did. He has helped me all the way through my bankruptcy with good advice and explained every step of the process. David is a very down to earth and very professional. Anytime I've had a question I was able to reach out to David by phone or email and he always got back to me. If your struggling with your bills and need a way to get help, I strongly recommend David Sklar &Associates to help you. My experience with them on 1-5scale would be a 5;; My life is so much better now, thanks to David Sklar.
Bruce Locke
16:13 08 Oct 21
I have had the privilege of being supported by Jackie S, at David Sklar n Associate.She was helpful, professional and friendly. I was able to get the help I needed at a difficult time in my life. I would recommend anyone who needs support with working out their debts to ask for Jackie, she will be waiting to assist however she can to help you through your debts. She works with a team who is always ready and responsive.Thank you Jackie and your team:)
Denise Simpson
15:17 09 Sep 21
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