I am submitting this question on behalf of my mother. She and my father are separating as of June 15, 2003. They have sold their home and each will receive approximately $35,000.00 cash from the sale. My mother has accumulated $20,000.00 in credit card debt over the past several years. She is receiving a disability pension which gives her $1100.00 per month. Her vehicle is old and likely valued at approximately $1000.00. The $35,000.00 in theory will be her life savings with the exception of approx. $8000.00 in RRSP's . Her possessions are minimal. She is 63 years old and is planning on moving into Government subsidized house in a small rural community. I have two questions.... If she files for bankruptcy is she able to retain the $35,000.00 she will receive from the house sale? AND What would be her best option?

The proceeds from the house sale would be available to the Trustee in a bankruptcy. The RRSP may also be lost unless it is in an exempt plan. From the information you've provided, your mother's best option would be to pay off her creditors from the proceeds of sale and stop using credit. The RRSP and remaining funds from the house could then be used to supplement her income.

Ann Clarke
phone: (403) 296-2972
aclarke@moneyhelp.ca