Can you use An RRSP to pay off Debt?

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Using RRSP  to Pay off Debts

If you have a sizeable debt load and are looking for some ways to have that debt reduced or paid off, you may be wondering if you could use your RRSP to pay off your debt. You may also be thinking, should I really use my RRSP to pay my debt?

Before Cashing in

Before you rush into cashing in your RRSPs, you need to consider all of your options available. You need to see if you are insolvent or not. If you are insolvent, you then may qualify for a government program. Getting the full facts before making this big decision can help you make a better informed decision for you and your family.

Avoiding Bankruptcy

This government program can help you avoid bankruptcy. Avoiding bankruptcy lets you keep your assets such as your home (mortgage payments) and car (auto payments), providing you keep up on the payments for each of these. Your unsecured debts are paid at a reduced rate into a monthly payments that is more controllable. Note, only contributions that have been made to RRSPs/RIFFs 12 months before filing, may be clawed back.

Consumer Proposals

This government program is call a consumer proposal. With a consumer proposal, your unsecured creditors are paid at a reduced amount. A proposal cannot be longer than five years. After this is completed, the individual is then released from the unsecured debt that was covered in the accepted proposal.

The Bankruptcy and Insolvency Act (which governs proposals) is designed to help protect people that are in financial distress, and helps people keep their RRSP and RIFFS. RRSPs/RIFFs 12 months before filing, may be clawed back.

Find Out More

Consider all your options before cashing in your RRSP to pay down your Debts. If you live in the Toronto Area, call us at 416-498-9200 to book a free consultation. During your consultation, we will review your finances in detail and go over all of your options for getting out of debt – in a professional and supportive environment.



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 worked primarily with Christine, who was very friendly and outgoing. She was quick to help me, and explained everything I needed to know very well. She's quick to answer any questions I may have as well. The other members I spoke with were also very kind and jovial, and were happy to help me with anything they could. They made sure my proposal fit within my budget, and got everything going very quickly. I was happy to work with them, and would highly recommend their very friendly service!
Melissa McAllister
Very processional and understanding of my situation. Thanks to all your team.
Luc Valade
Jennifer Norton's exceptional assistance with my consumer proposal was life-changing. Her professionalism, expertise, and dedication were evident from the start. Jennifer's thorough explanations and attention to detail created a tailored proposal that set a clear path to financial freedom. She went above and beyond, advocating for my best interests and providing invaluable support. Thanks to Jennifer, I'm on track to a stress-free financial future. I wholeheartedly recommend her – she's not just a financial expert; she's a life-changer. Thank you, Jennifer!
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From the moment I sat down in the office, I felt welcome and at ease. Grace Cuffaro was both friendly and highly informative. She is extremely knowledgeable and answered all of my questions in detail, making sure I understood before moving on. I was reassured throughout the process that I was making the right decision and that it was not uncommon nor anything to be ashamed of. I didn't expect my appointments to be such positive experiences, but that's exactly what they've been!
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I was in a tough financial position and found myself searching for relief. I came across David Sklar & Associates page when doing my research on financial advice. The reviews were amazing, but I was concern because I didn’t know what to expect. I made the decision to set up a consultation and had the pleasure to meet with Jennifer Norton. Right from the beginning, she was attentive, knowledgeable, and pleasant to meet with. The experience was painless and very educational. Jennifer made sure I understood my choices, answered my questions, and concerns promptly, in person, over the phone and via email. I’ve been working with Jennifer for a couple months now and I am pleased that Jennifer is the manager handling my file. I would and have recommend Jennifer Norton, David Sklar & Associates to anyone in need of direction regarding finances.
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