Are RRSP’s Creditor Protected?

It wasn’t too long ago that pensions, some locked in retirement accounts and insurance products were the only protected option for Canadian investors in the event of bankruptcy.  For the individual investor only the insurance options were available, as the rest would need to be set up by their employer (if they have one).  However as of July 2008, Bill C-12, an amendment to the Bankruptcy and Insolvency Act changed this.  This change provides the same protection for RRSP’s, Spousal RRSP’s, RRIF’s and some other registered accounts.

Hopefully no one invests with the intention of going bankrupt, but managing risk is about handling what we did not intend.  What this protection provides is a planning opportunity for those who want to protect themselves from this risk.  This could be a business person who wants to protect his retirement savings from business risk or a family hit by the financial devastation that can follow illness or injury.

The money does need to be place into a protected account a year before, and before you know of the pending issue.  The main purpose of this change as I understand it was to extend the same benefits of retirement savings offered to employees with a pension to those who do not have access to a pension.  As always before counting on this protection I would recommend discussing your unique financial situation with a professional as the smallest detail can make a big difference.

A last point would be to consult with a professional before accessing your money if you find yourself struggling financially.   Too often I see people cash out there RRSP’s and other protected investments trying to turn things around, when they could have saved those assets and used them to jump start a new financial life.



This post has been kept general, to find out if an RRSP is right for you, and how to best use this tool to move forward you should discuss it with a professional.  Details can be found on the government of Canada website. This information is assumed correct, but is for information purposes only and it is up to the reader to verify it’s accuracy before acting on anything written on this site.


This website is focused on rules as they impact residence of British Columbia.  My business is focused on Greater Vancouver, Langley and Surrey and I am happy to discuss these options with people residing in this area.