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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I was a little nervous going into my consumer proposal with David Sklar & Associates as I had a horrible experience attempting to file with a different group.Following the first correspondence, I immediately felt much more relaxed and confident in my decision.Beatriz was incredible! I feel so lucky to have had her working with me.She was friendly and kind, professional, patient, considerate, and caring. I felt no judgment in anyway. Honestly, speaking with her regarding my debt felt like I was speaking with a family member – just very easy to discuss how I ended up in my financial situation and being met with understanding, no judgment.Mark was also very kind and made sure that I understood what was discussed and was open to going over it again if needed prior to signing.David Sklar & Associates is the team you want handling and assisting you with your debt. I have only positive things to say about them and will 100% recommend them to anyone if the situation ever arises.
ally.
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Helped me with filing for bankruptcy and getting a fresh start and made the whole process seamless and easy.
Sameer Kamal
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I would like to say "Thank you very much" for David Sklar team that handled my case smoothly and without any issues! I am glad that I ve got consultation by Jerry Janiec. He explained me all process in details and told me right away what options I do have to resolve financial difficulties. I ve proceed with consumer Proposal option and entire process was very smooth. Jerry took care of my case and gave me personal recommendations for future! Thank you very much Jerry and Hernee for your help and really take care of your clients!
Alexander Arepyev
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Very knowledgeable, helpful and fast service
Anthony Mcfeat
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I am so delighted to have found this company. They are the best. Everyone in the office is very nice never to busy to assist you. Thank you David Sklar and Shirley and associates for being you. 😊🌺😊
Deborah
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Trina was amazing and quick. No judgement was made and they all made me feel I made the right decision. Would highly recommend them
Crystal Minaker
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Trina was very easy to work with. Any questions I had were answered promptly. What seemed like a complicated process was explained in a clear manner that wasn't at all intimidating. It made for a more comfortable experience during a turbulent time.
Eldon Aubie
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Jackie is very professional...I would recommend David Sklar to anybody especially knowing how understanding they are.
Kimberley Lyder-Niles
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I had Shirley and Kim take care of my finances. From the very first moment I spoke with Shirley I could sense how caring, professional and patient she was. She was also very understanding with my lack of financial knowledge and never made me feel dumb as some other companies have.Her and Kim were always very quick to respond to emails, always available if I called and answered my abundance of questions in such detail that I now believe I have a thorough understanding of how finances work. I am hopeful about my fresh financial start and very grateful I had the privilege of meeting and working with these two beautiful women.I also spoke briefly with Richard over zoom and he to was extremely friendly, patient and made sure I was well taken care of.I could not recommend David Sklar and Associates more. Thank you again.
Shayleen Muzi
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Good professional team! Jennifer is the best, helped me through everything and answered all my questions. Made the process easy! Would recommend Jennifer and the team at David Skylar.
gary round
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