Government Amends Insolvency Legislation relating to RRSPs and Student Loans

RRSP Change

Money in a RRSP, RIF or a deferred profit sharing plan will no longer be available for distribution among a bankrupt’s creditors.  Any contributions made in the 12 months before the date of the bankruptcy are subject to a claw back. Where provincial legislation exempts RRSPs from execution, the provincial legislation will apply.

Student Loan Debt

The amendments reduce the period of time from ten to seven years that a student must wait after ceasing to be a full or part-time student before a discharge order will release a student loan debt or obligation.  The “hardship provision” which allows for an application to have student loans discharged can now be made after 5 years.

 

 

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