Can you have Mutual Funds if you file for Bankruptcy?

Table of Contents

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, 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. 

Share This!

David Sklar & Associates Inc.
Excellent
5.0
Based on 1045 reviews
Danny Gottshalk
the service was excellent, Grace Cuffaro and Serena Sklar was very helpful and knowledgeable.
Martin Obrien
Trina was Very pleasant and professional to deal with made the process absolutely easy no stress at all explained everything simplified it down so I could understand it would definitely recommend it
Jordan Clarke
This place is great! Grace answered all my questions, very welcoming and I never felt judged! So far everyone I have dealt with was super polite, thorough and treated me with respect! 10/10 recommend!
Praise_Hymn P
They are very accommodating and very respectful. They do very professional and make sure your worries are being addressed. Excellent job Samycha thanks for the help.
Arci Olvez
Very helpful with all the inquiries and satisfied with their service!. Great company to work work with.
Sharon Baltzer
Treated very well. They showed me a great deal of respect. Felt a load had been taken off my shoulders. Would highly recommend.
Ken Burgess
Your staff was all very helpful and kind. They did not make you feel like a lesser person. We are so happy we went to see you to get us out of debt.
Lawrence Wolfe
My experience working with Trina and then the rest of the team was great. They listened to all my concerns and addressed them.
Robert Bartlewski
Great company with amazing experience. Satisfaction guaranteed. All information provided from experts help understand whole processes.
Ken Toolsieram
5 Star Trustees with alot experience. Answer all my questions needed.
js_loader
DS david skalr icon

Book your free consultation.

Call 1-844-962-9200 or fill out the form below. We’ll do the rest.

Contact Us