RESPs in Alberta Soon to be Exempt in the Event you File for Bankruptcy

Certain amendments to legislation in Alberta received Royal Assent and are to be coming in to force effective April 1, 2014.   One of these changes will be that RESPs (“registered education savings plans”) will be exempt.

This exemption will mean that in the event you file for bankruptcy in Alberta, or have creditors suing you and you reside in Alberta, RESPs that you hold for a beneficiary will not be lost.  You will get to keep these assets.

Until April 1, 2014 and for Alberta bankruptcies filed prior to that date, RESPs are not exempt.  This means that in an Alberta bankruptcy you would either lose this asset or have to repurchase it from your bankruptcy. 

Currently in Alberta, RRSPs, DSPs, and RRIFs are exempt.  Bill C38 when it comes into force will add RESPs to that list.  Bill C38 was sponsored by the Honourable Jonathan Denis, QC, MLA for Calgary-Acadia.