What happens to TFSAs and RRSPs in bankruptcy?

TFSA

Table of Contents

TFSAs (tax-free savings accounts) and RRSPs in Bankruptcy are treated differently. When filing for bankruptcy, you need to divulge all your assets to the Licensed Insolvency Trustee, and this includes a TFSA. Please note that TFSAs are not protected assets. RRSPs are protected, but RRSPs contributions that have been made 12 months before filing, may not be protected.

When first looking into bankruptcy, a Trustee needs to determine if you are insolvent or not. If you are declared insolvent, then you may be eligible for a consumer proposal or bankruptcy.

With personal bankruptcy

With personal bankruptcy, you are only allowed to keep certain assets that have been exempted by the Ontario Execution Act and in a Consumer Proposal – the individual filing is able to retain all their assets (providing they continue to make all required payments – i.e. mortgage/car loan etc.).

With a consumer proposal 

You may qualify for a Consumer Proposal if you owe less than $250,000 (not including the mortgage on the main home). With a consumer proposal, your get to keep your assets, which includes your tax-free savings account by providing monthly payments in a proposal. Also under a consumer proposal, the unsecured debt you owe is reduced and is paid off in five years or under. Legal action/ collection calls from unsecured creditors stop.

When meeting with a Licensed Insolvency Trustee, it is important to disclose all of your debts and assets, including your RRSPs, TFSA, and so on, as RRSPs and TFSA are treated differently.

Filing for Bankruptcy tends to be the last route after all options have been taken into consideration. Every situation is unique and meeting with a trustee at David Sklar and associates can help you determine the best option for you.

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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Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
Jasmine Joseph
22:08 13 Jan 23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
Ariel Domingo
02:33 29 Dec 22
I was a reck talking yo Jason Sklar was easy comfortable he explained everything and put my mind at ease I would recommend the team od sklar to everyone. I have already talked to my ci workers about them
kevin mcweeney
01:13 22 Dec 22
The team at David Sklar & Associates is fantastic.I worked with Jerry whom not only made - what seemed like intimidating process to initiate at first - comfortable.He made everything transparent and took the time to explain the process every step of the way.He was kind, attentive, and professional. Everything was made straightforward and stress free and we found a solution together that worked.Thanks to Jerry and the team.
Jordie Angiolillo
18:22 21 Dec 22
From day one till the end which is today😁 DavidSklar gave me a 5star service and treatment. And I will 100% recommend him and his Associates. This is the best Christmas present ever! Thank you David! More business to come! Merry Christmas and a Happy New Year!!!
barbee diaz
16:37 16 Dec 22
I FOUND DAVID SKLAR & ASSOCIATES BY GOOGLING "BANKRUPTCY" (EARLY NOV. 2021). ON NOV.4, 2021 I HAD A MEETING WITH CORI NARON AT HER OFFICE AT ST CLAIR ANDBATHURST. HER POSITIVE APPROACH TURNED ASTRESSFUL SITUATION INTO A STEP BY STEP UNDERSTANDABLE PROCESSON SEPT. 23, 2022 I OBTAINED MY AUTOMATICDISCHARGE FROM BANKRUPTCY AND MY CERTIFICATE OFDISCHARGE.THANK YOU CORIBRUCE BURGESS
bruce burg
21:35 02 Dec 22
Jerry was wonderful and provided superb service. He is very knowledgeable, trustworthy, and made an intimidating and shame filled time in my life stress free. I hesitated for a long time to take the next step, but Jerry answered all questions, was patient and made the process effortless. I am eternally grateful, and highly recommend Jerry’s services.
M J
18:41 01 Dec 22
Jerry was professional and was easy to deal with
Debbie Asquith
00:09 29 Nov 22
I was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
Melissa Blackburn
19:53 17 Nov 22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
Suzanna Vaclavik
12:21 16 Nov 22
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