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Creditor Protection for RRSPs, DPSPs and RRIFs

The passing into law of Bill C-12 on July 07, 2008 has now created an amendment to the Federal Bankruptcy and Insolvency Act.  As of this date, all registered investments (which include RRSPs, RRIFs and DPSPs) will now enjoy the same creditor protection as insurance and pension investments.

This protection applies to all bankruptcy actions initiated on or after July 07, 2008.  The new bill does state that contributions made to registered plans in the 12 months prior to the bankruptcy action (or longer if the Court has made such an order) may not be subject to this protection.  This is designed to deal with a situation whereby an individual purposely attempts to place funds beyond the reach of a creditor.

Until recently, such assets were not subject to the same creditor protection as those offered to Segregated Funds and Registered Pension monies.