Retirement savings, whether held in an RRSP or RRIF, are generally exempt from seizure, subject to some exceptions. Understanding these exceptions is important for both debtors and creditors.
When a non-consumer debtor files a proposal under the Bankruptcy and Insolvency Act ("BIA"), the creditors of the debtor have an opportunity to vote on the proposal. If the proposal is not accepted, the debtor is assigned into bankruptcy. In order to be accepted, a proposal must receive supporting votes from of a majority of the number of creditors, and those creditors must represent at least two thirds of the value of the claims against the debtor. Accordingly, a creditor with a large claim can in some cases control whether a proposal succeeds or fails.
If you owe money to someone, but they also owe you money on some other account, you are entitled to set off the one debt against the other, and only the net difference needs to be paid. This can change in bankruptcy.
The Manitoba Court of Queen's Bench was recently asked to opine on whether the 5% levy payable in bankruptcy matters to the Superintendent of Bankruptcy pursuant to s. 147 of the Bankruptcy and Insolvency Act ("BIA") was applicable to secured creditors. Secured creditors generally operate outside of bankruptcy proceedings.