RRSPs and Bankruptcy

2010-02-24

Author: Bradley Milne

In November of 2007, the Manitoba government introduced new legislation called the Manitoba RRSP Protection Act. Under this legislation, RRSPs, deferred profit sharing plans and RRIFs were protected from the enforcement process. They are now exempt and as such cannot be liquidated in bankruptcy.  The federal Bankruptcy & Insolvency Act was also amended in July of 2008 making RRSPs exempt.

Person typing on a laptop

There is some recourse for investigating transactions in the year prior to bankruptcy. For example, if you had $2,000 in a non-registered GIC and, before bankruptcy, moved it into an RRSP (that would be exempt) the Trustee may be able to reverse the transaction on the basis that it was done to evade creditors.

Someone with a large RRSP and a comparatively small amount of debt should not use the bankruptcy process to get rid of the debt while keeping the investment. This becomes a fairness issue and, in this case, the Trustee may consider making a court application to have some of the funds liquidated and/or a monetary condition paid into the bankruptcy estate.

Bradley Milne

Bradley Milne

CIRP, LIT

Senior Vice President

Servicing: Brandon, Killarney, Portage la Prairie, Neepawa, Virden, Souris, Deloraine

Latest Blog Posts

2025-05-26

How to exercise caution when investing in digital currencies

Lindsay Burchill

Lifestyle Debt

While digital currencies offer many opportunities, they also carry risks. How can you mitigate those risks before diving into the digital currency market?

Read More

2025-05-14

How to stop harassing creditor telephone calls

Alana Orrell

If your phone rings with relentless calls from creditors, you’re not alone — and you’re not without options. Creditor harassment can take a serious toll on your well-being, but you have rights, and there are clear steps you can take to stop the calls and regain control. 

Read More

2025-05-07

How to be a responsible credit card user

Leah Drewcock

Credit cards are a popular and convenient form of credit that can be a very useful tool.

Read More

Consultation icon