Will I Lose my RESP in Bankruptcy?
An RESP is set up usually by a parent or other family member by way of a contract with an institution (the scholarship fund) for the benefit of their child. The standard wording in the contract results in the RESP being considered an asset of the parent or other person that is divisible among their creditors in the bankruptcy. If you are in this situation, speak to your Licensed Insolvency Trustee about buying the RESP back from the bankruptcy so that it can continue to be of benefit to your child when he or she starts their post-secondary level of education. The purchase price and terms of payment can be negotiated but generally start at the dollar amount that the trustee would get if the RESP plan was collapsed. The usual payment terms are that you must pay the settlement amount for the RESP before you are discharged.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.