RRSP’s are exempt assets. RRSP’s are yours to keep and are protected from your creditors with the exception of any new contributions in the twelve months leading up to bankruptcy.
What happens to Income tax refunds, GST cheques and Child Tax Credits received from Revenue Canada when someone is in bankruptcy?
Income tax refunds – Tax refunds for tax years prior to bankruptcy or the year of bankruptcy would be forwarded by the government to your trustee. These refunds form property of the estate and would be available for distribution as a dividend to unsecured creditors.
- GST Cheques – GST will automatically be sent to your trustee while you remain in bankruptcy. Future GST cheques will be sent directly to the individual, by the government if you qualify to receive them, once you have been released from bankruptcy.
- Child Tax Benefit / Universal Child Tax Benefit – These cheques will continue to be sent directly to the bankrupt as a part of their income.