I have a Tax Free Savings Account (TFSA) but my debts total more than I have the ability to pay. I do not want to file a bankruptcy and am considering a proposal. Can my creditors force me to cash the TFSA as part of the proposal?
The short answer is “no.” When making a proposal you are offering a settlement to your creditors which they either accept or refuse. In your case if the creditors know you have the TFSA they may refuse to accept your original proposal and ask you to resubmit your proposal with an initial lump sum presumably coming from the TFSA But, once they refuse the original proposal it is your choice if you decide to make a second offer and it is their choice whether or not to accept a second (or third) offer.
Remember the creditors are only trying to recover as much of their debt as is possible. It is all about negotiating the amount that they are willing to settle for. That is the job that the Administrator of your proposal is doing for you.
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