Can I keep my TFSA if I go Bankrupt?

Can I keep my TFSA if I go Bankrupt

Table of Contents

 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, call us at 1-844-962-9200 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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So over the past few weeks I’ve had multiple contact with Christine. She was simply amazing. She helped me understand my debt and what options I had available to help relive some of my debt stress that’s affecting my own well being and my family.David Sklar and associates is simply put an amazing company and I highly recommend them to absolutely anybody needing help!
Adam Bertrand
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Christine Sylver was very helpful to my situation. No question asked, she went above and beyond just to give me the options that I need to solve my problems. She explained and made me understand my options. Thank you Christine! Everything was done in a week. Regards, to Richard Sklar for explaining everything further to me. 😊
Kris
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I was blown away by how kind and empathetic Christine and David were. I came into the process expecting to feel embarrassed, but they were so helpful and unquestionably supportive, they made the whole experience a positive thing. On top of that, Christine found a solution for me that was better than I ever could have imagined. I highly recommend Christine, David, and colleagues to anyone.
Mary M
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Christine Sylver has been very efficient in working with me in all aspects toward developing a very favourable consumer proposal which meets my financial budgeting very nicely. She also exhibited a very positive pro client attitude and was every pleasant to communicate with. Richard Sklar also demonstrated a very positive pro client attitude in explaining in detail all aspects. All great!!
Rob Hultgren
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Dealing with Christine was a real pleasure.She was very understanding professional and knowledgeable she answered all my questions.I left feeling relieved a big burden was lifted from my shoulders
John Horan
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Very happy I got in touch with Jackie! She has been a great help and a pleasure to work with! I highly recommend Jackie if you need help getting out of financial debt.
Hailey Cascagnette
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I had the pleasure of working with Jackie and she made the experience very easy and was very honest which I appreciated as I was extremely nervous to go through with the process. Any questions or concerns I've had after our meetings were answered no problems and although it's been a few weeks I can honestly say I've never felt so stress-free. Very thankful for Jackie.
Cassandra Arevalo
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Very considerate of how people can sometimes make mistakes and need help to get things back on track. Great team of people. Thanks to Jacqueline for all her help.
Kevin Chase
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My mother told me about this firm because they helped resolve her situation nearly 25 years ago. I had the pleasure of working with Christine Sylver. I should’ve done this years ago but I am where I am and it is what it is. Extremely courteous, professional and understanding. I hope to never need their services again but they would be my first call! A+
Patrick Martel
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Jerry was extremely thorough and ensured that as a client, I understood all of my options and their repercussions. He offered his professional advice best suited for my situation and he is amazing at his work. Thank you Jerry! :)
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