Can you have Mutual Funds if you file for Bankruptcy?

Mutual funds & Bankruptcy & When can you file for Bankruptcy

At first, bankruptcy can look scary, you may have questions such as ‘what will I lose’ and ‘what will I be able to keep?’  This is a common concern for many people. There are certain exemptions that you should know about to help alleviate your concerns. Also, you should know that when you meet with a Trustee, they will look at all available options with regards to your personal financial situation to help see what the best solution is. Bankruptcy tends to be the last resort option. Many times, a Consumer Proposal will be recommended instead.

Bankruptcy is designed to help give those honest but unfortunate debtors an ability to deal with their uncontrollable debts and help them move on with their lives.

When looking into bankruptcy we need to discuss with your trustee the exempt and non-exempt assets that you have and see how they will be affected. You may have Mutual funds, RRSPs, TFSA as a few examples of where you have money invested.

Non-exempt items/assets will generally need to be forfeited in bankruptcy. Exempt items/assets will be exempt forfeiture in a bankruptcy filing.

Mutual funds, Bankruptcy & Non Exempt Assets

So if you file for bankruptcy, what happens to your Mutual funds? Mutual funds may be rather non-exempt or exempt depending on who is administering your account. If your mutual funds are held in an account administered by a Life Insurance company and the investments are in segregated life insurance related products, your account may be exempt if you have a preferred beneficiary on your account. Preferred beneficiaries include spouse, parents, grandparents, children or grandchildren. Any other beneficiary and your account would be non-exempt. If your mutual funds are held with a bank, they will be non-exempt.

Your TFSA also falls into the non-exempt category.

Bankruptcy & Exempt Assets

RRSPs are exempt, but you would lose any money that was paid into your RRSP in the 12 months before filing your bankruptcy or proposal. So, if you had 10,000 invested into RRSPs, and over the past year you invested $1000, the $1000 would need to be paid into your estate either by you directly, or by collapsing that portion of the RRSP. The rest would be safe. Other exempt assets are your old age security, your Canada Pension Plan and your Registered Pension Plan. However, any payments received from these sources would be included as part of your income.

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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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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