ARE RRSPS EXEMPT FROM SEIZURES?
Not yet but maybe soon. RRSP’S are a way for people to make investiments to top up their employee pensions. You get an initial tax break to put money into an RRSP, and at some point in your retirement, you usually convert it to a RRIF, and start drawing a monthly payment (now taxable of course). There has always been an issue as to whether or not RRSP’S could be seized by creditors or on bankruptcy. Pension funds could not be seized but your RRSP which was to be a personal pension fund was not exempt from seizure; by creditors. A great deal of self employed individuals only had this vehicle with which to build up any kind of pension plan. If they fell on hard times, and declared bankruptcy, he or she kept there pension. An employee however who fell on hard times and declared bankruptcy, kept his pension. Not really fair. There is now some federal legislative which is to amend the Bankruptcy, and Insolvery Act. It is not in effect yet but it appears that RRSP’S and RRIF’S will be exempt
