Question: I live in British Columbia. Are RRSPs exempt from creditors?
Answer: The rules regarding RRSPs and bankruptcy are the same everywhere in Canada.
You are allowed to keep your RRSP, except for whatever you have contributed in the 12 months before your date of bankruptcy.
So, for example, if you have contributed $100 per month to your RRSP for the last 10 years, you only lose the amount you have contributed in the last 12 months ($1,200 in this example).
You have two choices:
First, you could simply offer to pay the trustee the value of the non-exempt portion of your RRSP ($1,200 in this example), and then you could keep it.
Second, the trustee could contact the RRSP company and collapse the amount you have contributed in the past 12 months. The trustee would be required to pay the tax on the withdrawal, and the remaining amount would go into your estate to be distributed to your creditors.
Your trustee can explain in more detail the rules regarding RRSPs and other assets in bankruptcy, and help you make a decision. You can contact a licensed trustee here.
If you have made large contributions to your RRSP in the last year, another option would be to file a consumer proposal, so that you don’t lose anything.