Consumer Proposals and TFSA and RRSP Investments

In the current economic climate, financial planning is more critical than ever. Specifically, understanding how consumer proposals and various investment vehicles like Tax-Free Saving Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) interact is essential. This guide will dive deep into these topics and provide a thorough analysis to aid your financial decisions.

Consumer Proposals, TFSAs, and RRSPs are three key components of financial management. Each plays a unique role in an individual’s financial health and has specific implications when dealing with financial difficulties. This guide will provide a detailed breakdown of these components and their interplay.

Understanding Consumer Proposals

A consumer proposal is a legally binding agreement between a debtor and their creditors. In this agreement, the debtor proposes to pay a portion of their debts over a specified period, typically up to five years.

Exploring TFSA Investments

A TFSA is a type of investment account that allows tax-free growth of investments within the account. This means that any income generated from the investments, whether it’s interest, dividends, or capital gains, is not taxable, even when withdrawn.

Delving into RRSP Investments

An RRSP is a retirement savings plan that you establish, that we register, and to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax.

Impact of Consumer Proposals on Investments

One common question is how filing a consumer proposal affects investments like TFSAs and RRSPs. The impact varies depending on the type of investment and the specifics of the consumer proposal.

Effect on TFSA in a Consumer Proposal

In a consumer proposal, TFSAs are not exempt from seizure by creditors. This means that if you file a consumer proposal, your creditors could potentially claim the investments held in your TFSA to recoup their losses.

Effect on RRSP in a Consumer Proposal

In contrast, most RRSPs are protected in a consumer proposal, except for contributions made in the 12 months immediately prior to filing the proposal. This protection allows you to keep your retirement savings intact while dealing with your current financial difficulties.

Meeting with a Licensed Insolvency Trustee

Before deciding on a financial course of action, it’s important to meet with a licensed insolvency trustee. They can provide expert advice tailored to your financial situation and help you understand the implications of a consumer proposal on your TFSA and RRSP investments.


Financial planning can be complex, particularly when dealing with financial difficulties. However, understanding the basics of consumer proposals and how they affect your investments can help you make informed decisions and achieve financial stability.

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