Submitted by nsscadmin on
The assets you are allowed to keep upon entering bankruptcy differ from province to province in Canada. What province you reside in does impact bankruptcy and can change your circumstances, so you should always research your province's specific legislation. However, under federal law, the Bankruptcy and Insolvency Act, which applies to all Canadians, there is some guidance when it comes to some investments.
Investments that are typically seized during all bankruptcies include savings bonds and investments held in TFSAs and RESPs. These are considered to be very liquid investments and easier to seize. When it comes to investments like stocks and bonds, these are also typically seized and sold in a bankruptcy, but we advise you to speak with a licensed insolvency trustee to find out your options.
Investments that are often protected in bankruptcy include RRSPs and pensions. Under federal bankruptcy law, you are allowed to keep your RRSP contributions, except for anything you have contributed in the past 12 months prior to filing for bankruptcy. In most cases, pensions are also exempt from bankruptcy seizure, but they also should be reviewed by a licensed insolvency trustee to make sure they fall under this exemption.
As there are many differences in provincial laws surrounding bankruptcy, we recommend discussing all your investment holdings with a licensed insolvency trustee to make sure you know the laws that apply in your province of residence.