# RRSP protected against all judgments?



## MoneySafe (Nov 24, 2019)

Hello all,

I hope there are some legal minds on this forum that could shed light on this topic. I am seeking a drastic reduction in my auto insurance payment by reducing coverages to the bare minimums. The value in my car is not worth paying for any extras, so I intend on purchasing just the minimum. In Ontario, the Liability for property/damages is $200,000.

To me, that's sufficient. I don't wish to purchase a dime more in coverage.

Let's say the theoretical worst thing happens: I cause an accident somehow. The other party and their insurance sues me and gets a judgment, let's say that judgment is for $800,000. My insurance is only going to pay the $200k, so the judgment could theoretically be roughly $600,000.

So here goes my question: I rent and have built my life on savings above my rent rather than paying mortgage. So there's nothing really in terms of property they can take from me. I do have a high amount in RRSP: over $50k, which is my life investment so far.

MAIN QUESTION: *Is my RRSP protected against a legal judgment in a courtroom against me, or would those funds be eligible to be seized and taken from me? Reminder: this is not a creditor/bad debt related judgment, this would be another type of legal judgment for an auto-accident related damages case.*

From what I read, it would appear an RRSP is protected, but I just want a legal opinion on the matter if there are any available.

Thanks.


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## Beaver101 (Nov 14, 2011)

A simple google says , no it's not protected unless the RRSP is with an insurance company or is a locked-in one (ie. LIRA). Link below, and for Ontario. 

https://www.justanswer.com/canada-law/7j4et-rrsp-protected-event-sued.html


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## Mukhang pera (Feb 26, 2016)

No, it's not protected. Why should an RRSP enjoy some kind of exempt status? If it did, professional debtors everywhere would be stuffing their RRSPs. But, you say you have read advice to the contrary. Care to share the source?



MoneySafe said:


> *IReminder: this is not a creditor/bad debt related judgment, this would be another type of legal judgment for an auto-accident related damages case.*
> 
> From what I read, it would appear an RRSP is protected, but I just want a legal opinion on the matter if there are any available.
> 
> Thanks.


Your "reminder" adds nothing to the mix. Except in the case of bankruptcy, a judgment is a judgment. One is no less enforceable than another.

I'll accept the proposition that a so-called "locked-in" RRSP enjoys a certain immunity from execution but, even then, that immunity might be more illusory than real. Once you start to receive payments from the plan, those payments may be seized. It won't help much for you to say that you will not receive any payments for some time into the future. No one with a $600,000 unsatisfied judgment is going to give up easily. In BC (and I expect in most Canadian common law jurisdictions), a judgment is good for 10 years and may be renewed every 10 years. Collections can be a game of both imagination and patience. So, the judgment creditor can simply sit back and wait for you to commence receipt of payments and said creditor may take out a garnishing order, a charging order, a writ of_ fieri facias_ or whatever device seems most effective to attach the funds.

There are other downsides to your plan to go underinsured. IF, a judgment goes against you, the judgment creditor can become quite a nuisance. You can be subjected to, _inter alia_, an annual examination in aid of execution or judgment summons. Under those procedures, the court can assess your ability to pay and order monthly payments, with jail time in default. You can be petitioned into bankruptcy.

Finally, let me observe that the implication of your intended course of action allows for some rather unpleasant consequences for the potential victims of your negligence behind the wheel. Let's say you injure a young person. A bright person just embarking on what would be a high-paid career. That person is rendered quadriplegic for life. How much life quality do you suppose the statutory minimum of $200,000 will purchase for that innocent victim? Your post suggests you have no sympathy and the prospect of that person living out the rest of their life in grim circumstances is okay by you, as long as you don't have to pay a "dime more" for coverage.


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## MoneySafe (Nov 24, 2019)

Interesting reads.

The reason why I ask is because there are tons of online sources that indicate RRSP's are protected from creditors. Such as this:

https://www.theglobeandmail.com/glo...ent-funds-from-creditor-claims/article549663/

But, that references creditors' lawsuits. It is still a bit confusing to me why one site would say absolutely not, another reference would say sure its protected from creditors.

And on the bit about feeling sorry for a hypothetical, I don't buy the sob story technique. Most vehicles are substantially under $200,000 in value, so property would be covered. We're also in Canada, so they have unlimited health benefits, there is no need to jack up my insurance costs on that basis. We aren't in the US where health care costs are structured radically different (for the worse).

In so far as income benefits, likewise there is the public disability program we all get. You get a disability cheque if you're disabled, for life. This occurs without any private insurance what-so-ever.

$200k is sufficient to me. I understand we need a basic level of insurance, and a $200k minimum is fairly high. I don't understand this sob story, I care very much for anyone who is involved in an accident. I've been in one where I wasn't at fault. It doesn't mean I want to pay hundreds of dollars to some private insurance cartel every month just for the privilege of driving. That is as unjust as anything else.


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## AltaRed (Jun 8, 2009)

Get sued for a few million due to causing someone to be grossly disabled for the rest of their life. You will never get out from under that judgement your entire life. Might as well just become a bum on the street.

Your plan is about the dumbest thing I have seen on CMF for years. Dont ruin your own life just because you did not pay for $1-2M of PL&PD.


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## Mukhang pera (Feb 26, 2016)

MoneySafe said:


> Interesting reads.
> 
> The reason why I ask is because there are tons of online sources that indicate RRSP's are protected from creditors. Such as this:
> 
> ...


Not sure why you would come here and ask, if you already have the answer you want from other sources. Mind you, it seems those sources do not cite much law.

As I have suggested, it's not difficult to create an RRSP that can be said to be locked-in or just about any other magic word employed to immunize it from execution. While that might protect the corpus of the RRSP for a time, every dollar you take out is not clothed with the immunity. In BC, there applicable law is found here, with the salient portions highlighted in bold italics:

COURT ORDER ENFORCEMENT ACT
[RSBC 1996] CHAPTER 78
Part 5 — Enforcement of Court Orders

_*Registered plans exempt from seizure*_
71.3 (1) In this section:

"DPSP" means a deferred profit sharing plan as defined in section 147 of the federal Act;

"enforcement process" means

(a) attachment,

(b) garnishment,

(c) execution,

(d) seizure, or

(e) any other remedy or legal process to enforce payment of a debt;

"federal Act" means the Income Tax Act (Canada);

"planholder" means

(a) with respect to a DPSP, a beneficiary under the plan,

(b) with respect to an RRIF, an annuitant as defined in paragraph (a) of the definition of "annuitant" in section 146.3 (1) of the federal Act, and

(c) with respect to an RRSP, an annuitant as defined in paragraph (a) of the definition of "annuitant" in section 146 (1) of the federal Act;

_"registered plan" means a DPSP, an RRIF or an RRSP, whether registered before, on or after November 1, 2008;_

"RRIF" means a registered retirement income fund as defined in section 146.3 of the federal Act;

*"RRSP" means a registered retirement savings plan as defined in section 146 of the federal Act.
*
*(2) Despite any other enactment, all property in a registered plan is exempt from any enforcement process.

(3) Subsection (2) does not apply*

(a) to property contributed to a registered plan after or within 12 months before the date on which the debt being enforced came due,

*(b) to property that has been or is being paid out of a registered plan,
*
(c) to an enforcement process that is being effected in support of the enforcement of a maintenance order as defined in the Family Maintenance Enforcement Act, or

(d) to an enforcement process initiated against a registered plan before November 1, 2008.

(4) For the purposes of subsection (3) (b),

(a) a transfer of property from a registered plan of the planholder

(i) to another registered plan of the planholder, or

(ii) after the death of the planholder, to the planholder's spouse or common-law partner as defined in section 248 of the federal Act who, under the terms of the registered plan, is entitled to receive that property on the planholder's death,

does not constitute a payment of that property out of a registered plan, and

*(b) if an enforcement process is pursued against property being paid out of a registered plan of a planholder, that property is deemed, for the purposes of that enforcement process and Part 1 of this Act, to be a debt due to the planholder for or with respect to the salary or wages of the planholder.
*

As for your asinine "sob story" comment, here's an abstract from a recent BC judgment, decided a few weeks ago. The matter arose out of a relatively minor motor vehicle collision and the injuries far from catastrophic:

Fancello v. Cupskey, 2019 BCSC 1724

The judgment runs to 101 printed pages and may be found here:

https://www.bccourts.ca/jdb-txt/sc/19/17/2019BCSC1724.htm#_Toc21349446

I double dog dare you to show us how taxpayer-funded benefits would be equivalent to the following award:

*SUMMARY*
[316] I assess the total of the damages available for Ms. Fancello as $1,836,036.33 made up as follows:

(a) the non-pecuniary damages of Ms. Fancello inclusive of inflation at $175,000;

(b) the past loss of earning capacity at $174,421 without court ordered interest. I leave it to the parties to agree on the effect of taxes on that award. The parties are at liberty to make written submissions by December 18, 2019 if they are not able to agree regarding the amount subject to taxes;

(c) the future loss of earning capacity at $750,000;

(d) the future cost of care at $650,000;

(e) the “in trust” claim of Ms. Fancello at $75,000;

(f) the Special Damages at $11,615.33; and


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## MoneySafe (Nov 24, 2019)

Mukhang pera said:


> Not sure why you would come here and ask, if you already have the answer you want from other sources.


Because those sources I've read are not absolute, they reference creditors' efforts to seize funds. Its a legitimate question.

Any information is helpful, thank you for that case finding. It appears that in a general sense, RRSP's are not absolutely protected from judgments, so the information I have been reading has been somewhat misleading. I was beginning to get the impression that they were protected, but this appears to be false.


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## MoneySafe (Nov 24, 2019)

AltaRed said:


> Get sued for a few million due to causing someone to be grossly disabled for the rest of their life. You will never get out from under that judgement your entire life. Might as well just become a bum on the street.
> 
> Your plan is about the dumbest thing I have seen on CMF for years. Dont ruin your own life just because you did not pay for $1-2M of PL&PD.


Your comment shouldn't honestly be dignified with a response, but I will say this. Each and every one of us has our own values with regards to the value of a product. When it comes to auto insurance, I believe its an industry rife with over-billing and does not provide a lot of value. Here in Ontario its 100% private, when I lived in Toronto it wasn't uncommon for some people to be paying $300/month for a fairly basic policy with a $1 mil liability. This is in excess of a car payment for an economy sedan, so people are paying more for insurance than for the car they buy in some cases. THAT is the dumbest thing, if anything is to be called dumb. Luckily I have moved to an area where this level of overbilling doesn't occur, but I still want to reduce my costs.

If reducing liability to $500k can drop a bill from $100+ to $75/month, that's a savings worth having. If you only get a $5 drop for getting it down to $200k, then I would likely keep it at $500k. These types of savings are reasonable to look for.

It doesn't bother me if someone else has a different opinion, and that honestly wasn't the point of the question to begin with. I wanted to know if an RRSP is protected from judgments, and it appears the answer (in absolute terms) is no. Some web sites suggest there are protections, but when it comes down to it, there isn't an absolute protection with regards to RRSP and general judgments seizing funds.

This is beneficial information for anyone, regardless whether they are as holy as you are and have as perfect and righteous of an opinion, or whether they happen to have a difference of opinion on the value of vehicle insurance products, and the often lack of willingness of them to pay benefits even if you're paying through the nose for them.


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## Mukhang pera (Feb 26, 2016)

Misleading is perhaps the better choice of adjective over "false". In many cases, you can protect the asset for so long as it remains intact and you don't touch it. Anything drawn from the plan is fair game. 

The last passage of the statute I highlighted was this:

*(b) if an enforcement process is pursued against property being paid out of a registered plan of a planholder, that property is deemed, for the purposes of that enforcement process and Part 1 of this Act, to be a debt due to the planholder for or with respect to the salary or wages of the planholder.*

A debt due to the judgment debtor may always be seized. That's the significance of that passage. It refers to "property _being_ paid out". That strongly suggests that the funds may be intercepted before they reach your hands. That's exactly how I would expect it to operate.


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## Topo (Aug 31, 2019)

I don't think the OP should be judged for trying to protect his retirement assets. The obligation for the driver is to buy the minimum insurance prescribed by the law. Although most people do elect to buy additional insurance coverage, this is done mostly as a matter of CYA, not because they feel compassion for the victims. The word "victim" here may be a bit misplaced too, because there are a lot of insurance claims that are simply opportunistic.


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## MoneySafe (Nov 24, 2019)

Topo said:


> I don't think the OP should be judged for trying to protect his retirement assets. The obligation for the driver is to buy the minimum insurance prescribed by the law. Although most people do elect to buy additional insurance coverage, this is done mostly as a matter of CYA, not because they feel compassion for the victims. The word "victim" here may be a bit misplaced too, because there are a lot of insurance claims that are simply opportunistic.


+1

Also, car insurance companies often don't like to pay the benefit you're paying for and will fight you. Why pay all that monthly rate when the chances of them honouring a contract unless you drag them into court is often a crap shoot?

I went through an accident some years ago, in Ontario the insurance is no-fault so the claim was with my provider, and it took half a year almost before I argued on the phone countless times and got a cheque.

Forgive me, but the industry hasn't earned a lot of trust from me. Maybe it is better in areas like Manitoba where its public insurance, but here its 100% private. The companies are out for a profit and that's their interest. Service and support is secondary to them. I'm actually a native Manitoban, and no one I know would be paying $300/mo for insurance, yet in Ontario its common in places like Toronto. The prices are outrageous!


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## james4beach (Nov 15, 2012)

I don't have legal training and I'm having trouble following the discussion above.

From what I read elsewhere, I thought RRSPs were protected from creditors during bankruptcy. If you declare bankruptcy, the RRSP is protected:
https://www.advisor.ca/columnists_/frank-di-pietro/protecting-rrsps-from-creditors/
https://ca.rbcwealthmanagement.com/delegate/services/file/124424/content



> The federal Bankruptcy and Insolvency Act (BIA) provides creditor protection to registered
> retirement investment products (e.g., RRSPs, RRIFs and deferred profit sharing plans or
> DPSPs), but only in the event of bankruptcy.
> . . .
> ...


So what happens if an insurance company sues you, you are found liable and ordered to pay 800K that you don't have? I presume you would declare bankruptcy, would you not? And then your RRSP would be protected, right?


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## MoneySafe (Nov 24, 2019)

james4beach said:


> I don't have legal training and I'm having trouble following the discussion above.
> 
> From what I read elsewhere, I thought RRSPs were protected from creditors during bankruptcy. If you declare bankruptcy, the RRSP is protected:
> https://www.advisor.ca/columnists_/frank-di-pietro/protecting-rrsps-from-creditors/
> ...


This is what I'm gathering the more I read on the topic. Your RRSP isn't protected generally from a court judgment, but its protected if you go through bankruptcy.

..makes me ask one more question. Could you file bankruptcy on a judgment after a hypothetical worst-case car accident scenario where they actually came after you and got a judgment, and your insurance created a significant deficiency?

Hmm. I shall fire up google again.


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## twa2w (Mar 5, 2016)

You may be thinking of this

The Bankruptcy and Insolvency Act (BIA) under section 67 (1) (b.3) exempts RRSPs from seizure for your creditors except for any contributions made within the last 12 months.

This legislation only applies if you go bankrupt AFAIK. Although I cannot confirm that as things may have changed as I have not kept up since the BIA was amended to exempt Rsps.

I believe some provinces, BC and Alberta, may have further protection so you may want to check that.


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## MoneySafe (Nov 24, 2019)

https://bankruptcy-canada.com/bankr...-and-garnishments-in-canada-no-need-to-panic/

And a quick link already pops up. It does appear that bankruptcy could get rid of a judgment in my worst-case-scenario auto accident.

This is interesting.


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## james4beach (Nov 15, 2012)

Note that anything you add to the RRSP in the most recent 12 months is still up for grabs, even with bankruptcy. This is to prevent someone who knows they are in trouble from loading everything into the RRSP when facing imminent bankruptcy.

Another note, if there's a 800K judgement against you and you actually have 800K, then you aren't insolvent and can't declare bankruptcy. In that case you will have to pay the 800K.

As a total non expert, my understanding is: the only way this RRSP protection works for you is if the judgement would actually force you into insolvency (you don't have enough money). Then, you at least get to keep your RRSP.


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## MoneySafe (Nov 24, 2019)

james4beach said:


> So what happens if an insurance company sues you, you are found liable and ordered to pay 800K that you don't have? I presume you would declare bankruptcy, would you not? And then your RRSP would be protected, right?


Unless I'm misreading as well, this appears to be an avenue to protect your savings from a severe judgment against you. So you aren't actually destroyed for life, bankruptcy does protect.

To be honest, my $50k+ in an RRSP, as long as it is safe, I could care less if the $2-5k or whatever I was able to save in the past year was less safe. As long as a life savings isn't stolen from me due to an accident that is not intended, that is the important thing!


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## MoneySafe (Nov 24, 2019)

james4beach said:


> Another note, if there's a 800K judgement against you and you actually have 800K, then you aren't insolvent and can't declare bankruptcy. In that case you will have to pay the 800K.
> 
> As a total non expert, my understanding is: the only way this RRSP protection works for you is if the judgement would actually force you into insolvency (you don't have enough money). Then, you at least get to keep your RRSP.


I don't know if that's how bankruptcy works exactly, but it is an interesting point to explore.


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## james4beach (Nov 15, 2012)

I am not totally sure about this kind of protection. Insurance companies are pretty powerful so I'm not convinced about this safety.

But from what I read, it sounds to me like if you declare bankruptcy, your RRSP is protected (except anything you added in the last 12 months).

Also remember that the law can change. For example, due to pressure from the insurance lobby.


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## twa2w (Mar 5, 2016)

james4beach said:


> Another note, if there's a 800K judgement against you and you actually have 800K, then you aren't insolvent and can't declare bankruptcy. In that case you will have to pay the 800K.


Only if his assets are non exempt assets. If he has an 800k judgement and an 800k rsp but no other assets, for bankruptcy purposes, he has no assets.

However, I believe there may be some law about going bankrupt simply to avoid a lawsuit. Not sure if that applies in this case or if that is province specific.
Edit - I think this applies to certain types of debts like student loans, not provinces now that I think about it.


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## Topo (Aug 31, 2019)

As I understand it from what was discussed earlier in the thread, even if one does protect their RRSP through bankruptcy, when the time comes to withdraw the funds (e.g. after mandatory conversion to an RRIF), the amounts being withdrawn could be taken and applied against the judgement. So an RRSP is not exactly like a Swiss bank account or a stash of gold bullion.


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## MoneySafe (Nov 24, 2019)

twa2w said:


> Only if his assets are non exempt assets. If he has an 800k judgement and an 800k rsp but no other assets, for bankruptcy purposes, he has no assets.
> However, I believe there may be some law about going bankrupt simply to avoid a lawsuit. Not sure if that applies in this case or if that is province specific.


This is what I'm understanding may be possible: if the $800k was in a TFSA or standard savings account, then it would not be protected under bankruptcy.

Since it is in an RRSP, it should be protected against a judgment, because the bankruptcy law is what protects the RRSP funds regardless of circumstance. All the google links and the provided links suggest this is what bankruptcy provides for.

None of the bankruptcy cases I'm reading say if you have $100k in outstanding debt, and $30k in RRSP, that they take a portion of your RRSP. All the case scenarios I'm reading show RRSP's are protected in bankruptcy. So performing the act of filing for bankruptcy after a massive judgment, and if its in the RRSP account, its therefore safe.


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## james4beach (Nov 15, 2012)

I think you might want to consult with a lawyer to be absolutely sure about this. Could be worth a $300 consultation.


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## twa2w (Mar 5, 2016)

Topo said:


> As I understand it from what was discussed earlier in the thread, even if one does protect their RRSP through bankruptcy, when the time comes to withdraw the funds (e.g. after mandatory conversion to an RRIF), the amounts being withdrawn could be taken and applied against the judgement. So an RRSP is not exactly like a Swiss bank account or a stash of gold bullion.


Well not exactly. The judgement cannot be resurrected after the bankruptcy. It is just like any other creditor. It gets wiped clean through the bankruptcy. 

And even if it didn't, depending on the OPs age, it is doubtful the crefitor will follow the guy until age 72 to collect 20% of his RIF payout. And that is if the statute of limitations does not run out on the judgement.


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> I am not totally sure about this kind of protection. Insurance companies are pretty powerful so I'm not convinced about this safety.
> 
> But from what I read, it sounds to me like if you declare bankruptcy, your RRSP is protected (except anything you added in the last 12 months).
> 
> Also remember that the law can change. For example, due to pressure from the insurance lobby.


That is true. RRSP protection was created in both federal and provincial legislation around 2009. Any government can take it away again, and I expect that to happen if we were to see folks with large RRSPs coming through the bankruptcy financial carwash unscathed.

Keep in mind that bankruptcy has its own downsides. It makes a mess of one's credit for a long time. Moreover, it's not a simply matter of standing up and shouting "I am bankrupt" and all one's debts are immediately expunged. Your present and future ability to pay your debts will be assessed. If the bankruptcy is seen as a means to escape a single judgment, it is generally looked upon by bankruptcy courts with some disfavour. The court can (and almost always does) order some payment of the debt, by monthly payments. The bankrupt will remain undischarged until the amount set has been paid in full.

It's beyond the scope of this thread, but some judgments are not affected by a bankruptcy, including where the judgment is based on fraudulent activity by the bankrupt or if the judgment is for damages for sexual assault.


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## MoneySafe (Nov 24, 2019)

Topo said:


> As I understand it from what was discussed earlier in the thread, even if one does protect their RRSP through bankruptcy, when the time comes to withdraw the funds (e.g. after mandatory conversion to an RRIF), the amounts being withdrawn could be taken and applied against the judgement. So an RRSP is not exactly like a Swiss bank account or a stash of gold bullion.


That will require more research. I'm not sure this is true, because judgments also have statutes of limitations against them. A judgment isn't able to be collected if you're talking 15 years in the future.

It doesn't make sense that bankruptcy would protect your RRSP against a judgment then when you take money out it gets immediately taken, that doesn't calculate to me. But I'm also not saying I understand how it all works.


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## MoneySafe (Nov 24, 2019)

Mukhang pera said:


> That is true. RRSP protection was created in both federal and provincial legislation around 2009. Any government can take it away again, and I expect that to happen if we were to see folks with large RRSPs coming through the bankruptcy financial carwash unscathed.
> 
> Keep in mind that bankruptcy has its own downsides. It makes a mess of one's credit for a long time. Moreover, it's not a simply matter of standing up and shouting "I am bankrupt" and all one's debts are immediately expunged. Your present and future ability to pay your debts will be assessed. If the bankruptcy is seen as a means to escape a single judgment, it is generally looked upon by bankruptcy courts with some disfavour. The court can (and almost always does) order some payment of the debt, by monthly payments. The bankrupt will remain undischarged until the amount set has been paid in full.
> 
> It's beyond the scope of this thread, but some judgments are not affected by a bankruptcy, including where the judgment is based on fraudulent activity by the bankrupt or if the judgment is for damages for sexual assault.


I think what you're referring to is criminal vs civil judgments. We're exclusively talking civil judgments, e.g. an insurance company suing you. I am aware criminal judgments are a different matter and aren't subject to protection under bankruptcy.

With regards to bankruptcy being used for a single judgment, if that judgment is extreme I don't think a court would find it odd. If you only have $50k in RRSP savings and you have a worst case scenario of $600, 800k, or over a million judgment in a civil court, it seems any court would recognize there is near zero chance that kind of judgment would ever be paid off, and an RRSP is protected under bankruptcy law.

But again, I'm working on just basic info with more questions than answers.

Likewise, an insurance company (or individual) would be stupid for filing a lawsuit against an individual who they know they can't collect on.


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## fireseeker (Jul 24, 2017)

MoneySafe said:


> It does appear that bankruptcy could get rid of a judgment in my worst-case-scenario auto accident.
> This is interesting.


I understand your animus toward the insurance industry. Others feel the same way.

However, there is another way of thinking about this.
Upthread, you talked about saving $25 a month ($100 to $75) in insurance costs by going for the lower liability coverage. You recognize this raises the risk of a judgment that might exceed your coverage, so you are now looking at whether bankruptcy might shield your $50K RRSP from creditors.

Why not just pay the $25 a month to take the whole risk of a massive judgment off the table?? 

You may feel $300 a year is an excessive fee to protect you from the unlikely event of a large liability. But is sweating the extra cost worth taking on the extra liability risk?


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## Topo (Aug 31, 2019)

twa2w said:


> Well not exactly. The judgement cannot be resurrected after the bankruptcy. It is just like any other creditor. It gets wiped clean through the bankruptcy.


I think you are right. Otherwise, there would be no point in declaring backruptcy to begin with.


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## Mukhang pera (Feb 26, 2016)

MoneySafe said:


> I think what you're referring to is criminal vs civil judgments. We're exclusively talking civil judgments, e.g. an insurance company suing you. I am aware criminal judgments are a different matter and aren't subject to protection under bankruptcy.
> 
> With regards to bankruptcy being used for a single judgment, if that judgment is extreme I don't think a court would find it odd. If you only have $50k in RRSP savings and you have a worst case scenario of $600, 800k, or over a million judgment in a civil court, it seems any court would recognize there is near zero chance that kind of judgment would ever be paid off, and an RRSP is protected under bankruptcy law.
> 
> ...


As someone who practised law for quite awhile in BC, I must confess to not being aware of a "criminal" v. a "civil" judgment. So, perhaps in my ignorance, I don't have a clue as to that to which I refer. I'll let you educate me. From my limited knowledge, the criminal courts certainly hand down judgments, the most basic being judgments of conviction, acquittal and sentence. Then of course, all kinds of interlocutory rulings in both criminal and civil court are generally called "judgments" or "orders". But criminal courts seldom make orders for the payment of money. The only real exception that comes to mind is an order for restitution. Those are most often seem in cases such as where the trusted company controller embezzles $250,000 over a few years, gets found out and is convicted of fraud under s. 380 of the Criminal Code. The court will sometimes order restitution - payment of the amount stolen - as part of the sentencing process. Fines are another form of criminal judgment, I suppose, as well as the "victim fine surcharge" imposed on occasion in recent years, until the Supreme Court of Canada recently struck down the enabling legislation as unconstitutional.

As for my comment about courts being a tad shy about allowing a single-judgment-driven bankruptcy to see the bankrupt released with impunity, I rely on those cases, of which the following is typical (see, in particular, para. 21 _et seq_.):

https://www.bccourts.ca/jdb-txt/sc/99/00/s99-0055.txt


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## Topo (Aug 31, 2019)

fireseeker said:


> I understand your animus toward the insurance industry. Others feel the same way.
> 
> However, there is another way of thinking about this.
> Upthread, you talked about saving $25 a month ($100 to $75) in insurance costs by going for the lower liability coverage. You recognize this raises the risk of a judgment that might exceed your coverage, so you are now looking at whether bankruptcy might shield your $50K RRSP from creditors.
> ...


I think the issue is more than the increased premiums. The maximum liability coverage offered here in BC for example is 5mm (at least that's what was offered to me). But I could see a driver hitting black ice and clipping a school bus..... That kind of judgement will run into the tens of millions.


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## Mukhang pera (Feb 26, 2016)

MoneySafe said:


> That will require more research. I'm not sure this is true, because judgments also have statutes of limitations against them. A judgment isn't able to be collected if you're talking 15 years in the future.


In BC, the applicable legislation is this:

*LIMITATION ACT*
[SBC 2012] CHAPTER 13

Basic limitation period for court proceeding to enforce or sue on judgment
7 Subject to this Act, a court proceeding must not be commenced to enforce or sue on a judgment for the payment of money or the return of personal property,

(a)if the judgment is a local judgment, more than 10 years after the day on which the judgment becomes enforceable, or

(b)if the judgment is an extraprovincial judgment, after the earlier of the following:

(i)the expiry of the time for enforcement in the jurisdiction where the extraprovincial judgment was made;

(ii)the date that is 10 years after the judgment became enforceable in the jurisdiction where the extraprovincial judgment was made.

The way that provision was interpreted and applied in my time at the bar was that a judgment is good for 10 years. It will be good for another 10 years if _before_ the initial 10 years has run, one commences an action on the judgment. If you are late, and the 10 years has run already, you have nothing left. Well, like just about everything in law, there are exceptions. A part payment of the debt or an "acknowledgment" of the debt in writing will start the limitation period running anew - see s. 24 of the Act. There are also all kinds of ways in which the running of the limitation period will be "postponed", eg. for persons under a "disability". Being under the age of majority is a legal "disability". Hit a 5-year-old with your car and the limitation period for that person's claim starts to run only when they turn 19.


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## OptsyEagle (Nov 29, 2009)

I kind of remember when that RRSP protection law went into effect as well. I'll admit I did not directly relate it to bankruptcy only although that is probably what they did. I did like it when it went into effect because I always knew pensions were protected but for those of us that had to build up our retirement funds in an RRSP, because we did not have a pension, it did not seem fair to apply a double standard. If pensions are going to be protected then RRSPs should be protected. 

In this case, and almost all other cases, the fact that it relates only to bankruptcy probably does not matter much because from my experience, I have seen it time and again. A person or company goes to court to fight a civil case. They lose. They immediately go bankrupt. Now they win.

Seemed like a dumb process to me but the good news for the OP is that if all he has is his money in an RRSP and insufficient insurance, the defendants lawyer will not even take the case (unless the defendant is dumb enough to pay him on an hourly basis instead of a % of the win basis). The only people or companies that I know that ever get sued are the ones with money. You are suing for money, so why sue someone who doesn't have it or can easily avoid paying it?


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> if all he has is his money in an RRSP and insufficient insurance, the defendants lawyer will not even take the case (unless the defendant is dumb enough to pay him on an hourly basis instead of a % of the win basis). The only people or companies that I know that ever get sued are the ones with money. You are suing for money, so why sue someone who doesn't have it or can easily avoid paying it?


A good reminder that people with any significant net worth absolutely need to be careful about liability. Perhaps "significant" means that net worth far exceeds the RRSP.

Protecting oneself from liability means:
- solid insurance policies (1M or 2M auto liability)
- sufficient home insurance with liability/ injury to others
- professional liability insurance if applicable
- sufficient cash/liquidity to afford a good lawyer

I suspect that the last item is important, because it seems that people who cannot afford good lawyers end up with more trouble. And I somehow doubt that lawyers take it at your word that you can pay them later, or take comfort knowing you have high net worth stored in your house... that doesn't pay their bills.


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## Longtimeago (Aug 8, 2018)

You ask for a legal opinion and you have been given some response to that. You then go on to talk about how you don't like the insurance industry etc. which is another topic entirely and you have been given some responses on that. I'll give you a third topic to consider. Your MORAL responsibility.

If you cause an accident which results in a $800k judgement, it will not be for just the damage to someone's vehicle obviously. You are talking about a situation where you will have done serious physical damage to a PERSON/S. So where is your moral responsibility in this equation you are looking at? 

Legal and moral are not synonyms. You have a moral responsibility and trying to shelter your RRSP money 'legally' from having to pay for that is immoral.


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## james4beach (Nov 15, 2012)

A counterargument Longtimeago is that the person who is injured will still be looked after. The payments will come from the insurance company whether or not they can recover costs by suing the driver.

So what you're really arguing for is not a moral responsibility to help someone who is harmed (as you're implying), but a "moral responsibility to make an insurance company whole instead of shouldering the corporation with the full burden of a claim".

We do not have any moral responsibility to protect the financial interests of giant corporations. They do the math on these things, and insurance always takes some risk. It's intrinsic to their business and they wilfully take on those risks.

The driver does have a moral responsibility to carry insurance, and drive as carefully as possible. Having an insurance policy with 200K liability, and of course being a cautious driver, does satisfy the moral obligations.


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> A counterargument Longtimeago is that the person who is injured will still be looked after. The payments will come from the insurance company whether or not they can recover costs by suing the driver.
> 
> So what you're really arguing for is not a moral responsibility to help someone who is harmed (as you're implying), but a "moral responsibility to make an insurance company whole instead of shouldering the corporation with the full burden of a claim".
> 
> ...


james, I have to disagree with you vehemently on this. 

In the event of an MVA caused by the negligence of a driver (the defendant), and another party (the plaintiff) is injured, it is up to the plaintiff to pursue the defendant. In MVA cases, there is almost always an insurer behind the defendant because the law requires drivers to be insured. But the mandatory amount of liability insurance is limited. In BC it has been $200,000 for about as far back as I can remember. There is never a case where an insurance company sues the driver to recover costs, as you suggest they might. The insurer that will pay is the driver's insurer and that's what the insurance is for. Drivers do not pay for insurance expecting their insurer to pay the plaintiff and then turn around and sue their own insured to recover. What would be the point of that kind of "insurance"?

As for your suggestion that the "payments will come from the insurance company", regardless, is wrong. The defendant driver's insurer will pay, if required, to the policy limit and no more. So, if the plaintiff sues and recovers judgment for $2 million and the defendant's policy provides coverage with a limit of $200,000, the insurer will pay $200,000 and not a penny more. The plaintiff will be left to see if any of the remaining $1.8 million can somehow be squeezed out of the defendant. If that defendant happens to be like the OP, and has arranged his affairs to be judgment-proof, the plaintiff is out of luck. 

I happen to agree with LTA, that it's not all about doing as much you can to protect your own assets and leave what might be some grievously-injured party to his own devices. Upthread I invited the OP to respond to my question about what a court might award as damages and what might be paid under an insurance policy at statutory minimum.

I said to the OP that "I double dog dare you to show us how taxpayer-funded benefits would be equivalent to the following award:" I received no response to my dare.

SUMMARY
[316] I assess the total of the damages available for Ms. Fancello as $1,836,036.33 made up as follows:

(a) the non-pecuniary damages of Ms. Fancello inclusive of inflation at $175,000;

(b) the past loss of earning capacity at $174,421 without court ordered interest. I leave it to the parties to agree on the effect of taxes on that award. The parties are at liberty to make written submissions by December 18, 2019 if they are not able to agree regarding the amount subject to taxes;

(c) the future loss of earning capacity at $750,000;

(d) the future cost of care at $650,000;

(e) the “in trust” claim of Ms. Fancello at $75,000;

(f) the Special Damages at $11,615.33.

james, let's look at that award, and its components, for a moment. And let's put you in the shoes of the "victim" of the negligence (I know, Topo says there are few victims, mostly scammers. But there must be at least a few people hurt by motor vehicles). You james, recently mentioned recent earnings of about $140,000 a year. You are in your 30s and might have another 30 or so working years. Let's say you are injured in an MVA. Not your fault. Your injuries are such that you cannot return to work. You are now confined to a wheelchair. So there you sit. Your life as you knew it, gone. One of the underpinnings of an award of damages is to provide, _inter alia_, what the courts have called "solace". You receive money to replace, so far as possible, what has been lost. You can no longer go for hikes in the Swiss Alps (having taken a page from LTA's book), but perhaps, with money, you can find some things to give you pleasure in your now reduced state.

In the case I have cited, non-pecuniary damages were assessed at $175,000. Non-pecs are also known as "general damages" or "damages for pain and suffering". There Supreme Court of Canada set a "cap" on such damages in a "trilogy" of cases back around 1970. The "rough upper limit" for such damages was set at $100,000. Court to this day follow that, and now, adjusted for inflation, the max award is around $370,000. That would be for a "total wreck" plaintiff, but still alive. Here, the award of $175,000 has almost consumed all of our cheapskate defendant's policy limit of $200,000.

Next, our plaintiff received $174,241 for "past loss of earning capacity", known more simply as page income loss or past wage loss. That is to compensate you for the income lost by reason of your injuries from the date of the accident to the date of trial. In your case, james, if you were unable to work at all and it took 4 years to get to trial, you would be looking at an award of $140,000 x 4 = $560,000 for past wage loss. With $200,000 of insurance available, and $175,000 already taken up by non-pecuniary damages, you have only $25,000 left to go, so you won't see much of that $560,000.

Then there was an award for future loss of earning capacity of $750,000. That's to recognize the fact you cannot go back to your old job at your former earnings. In your case, if the court accepts that you would have worked to age 65 at $140,000 a year, you could be looking at the present value of $140,000 times 30 years or whatever, less any amount the court considers you might be able to earn, if you are found to have some "residual earning capacity". Again, any award would be moot, with the insurance coverage long exhausted.

Future care costs were allowed at $650,000 in the case cited. Those are costs that provincial healthcare plans cannot be expected to pay. They can cover a host of things. A new motorized wheelchair every 10 years. A hand-controlled motor vehicle, if you require such. The cost of modifications to your home to be wheelchair accessible. Prescription and over-the counter meds. Occupational counselling and therapy; psychological counselling; massage, chiropractic and physiotherapy; treatment at a live-in pain clinic; nerve block injections; Botox therapy; home care including housekeeping services. But again, alas, that $200,000 will cover none of this. 

Do you really believe there is some "white knight" insurance company that will step forward and cover all these things because it will make you feel better? Do you know of any taxpayer-funded program that will hand over the $1.8 million? So, if you are the innocent victim, would you not want these things, or could you be content with being parked in a downtown eastside hotel room for the rest of your days, living on a government disability allowance of $1,000 or so a month, looking out a dirty window onto East Hastings St. and wonder about what might have been? Apparently that would suit the OP just fine. If he gets wrecked by a defendant driver who astutely limited his liability, he won't mind living the life of a broken-down pauper to the end. I know that I would resent it.

Here's another BC case from a few weeks back. A pedestrian clobbered in a crosswalk. The little scammer romped home with $2.2 million. Had she met up with the OP, she would not be smiling. Or maybe she would, in admiration of an astute financial planner.

Dinnissen v. Lee, 2019 BCSC 1729

https://www.bccourts.ca/jdb-txt/sc/19/17/2019BCSC1729.htm


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## Topo (Aug 31, 2019)

I guess the question is why doesn't the law mandate higher coverage, given that such accidents and the resulting judgments are not uncommon. On the other hand the law affords creditor protections to RRSPs, making it difficult for plaintiffs to collect. 

Maybe people who spend every cent they earn immediately and go into debt to fund a lavish lifestyle they cannot afford, have it right after all.


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## james4beach (Nov 15, 2012)

I was not aware of what Mukhang pera posted.

Now I think the question should be, why does government allow coverage as low as 200K? If as a society, we think that 200K is insufficient in practice, then we should translate this moral position into law.

My understanding of society's moral position is: you are doing the right thing as long as you have the minimum 200K liability insurance.

I don't think it's sensible to both define what is proper and acceptable (200K) and then blame someone like the OP for choosing for this coverage. They are not out to harm or cause anyone damage. They are choosing the legal option which is provided, because it's what they can afford. They are also taking sensible steps to protect their RRSP.

If 200K liability is a horribly immoral choice to make, then this awful immoral choice should be banished from society and upped to whatever threshold is the moral and upright level.


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## james4beach (Nov 15, 2012)

Mukhang pera, that's a nice example about the hypothetical harm to me from a motor vehicle accident. Yes, let's say there are $2 million in total harms of various kinds... medical needs, replacement of income. I totally agree that something like this could happen to me.

So we've determined that the OP is immoral with his 200K liability coverage.

How about another typical driver, somebody with 1M liability? Well that won't cover my bills either. Now I'm going to try suing the person to recover the second 1M, and of course I can't, because nobody really has that kind of money sitting around.

I get your broad point but this is also about thresholds. 200K isn't enough. 1M isn't enough. What is enough then?

We should adjust the laws to ensure that insurers actually provide as much coverage as is needed. If 200K isn't enough, fine, let's eliminate that. But you're describing a scenario in which someone with 1M liability doesn't cut it either.

If your argument is that 2M of damages can easily be seen, *then the legal minimum should be 2M*, so that insurers pay out that amount standing with the defendant. In our society, if these are common costs that need recovery, we shouldn't have to sue the drivers to recover these outlandish amounts of money -- since nobody has that money in any case.

Whether you sue a driver for 500K or 1M, my guess is that you won't get any $. We live in a country where most people barely have a few hundred K entering retirement. Do you think anyone... especially a younger driver... has even 500K to recover, no matter how thoroughly you sue them?

The recovery should be coming from insurance. And it can, if the policy provides that liability coverage. So let's legislate the insurers to provide sufficient coverage so they're actually doing something useful. And yes, the premiums will go way up, as they should. Driving is damned dangerous.


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> If 200K liability is a horribly immoral choice to make, then this awful immoral choice should be banished from society and upped to whatever threshold is the moral and upright level.


In my view, that is what should happen. And if you can't afford adequate coverage, you don't drive. Very simply.

And james, in deciding whether the 200k is horribly immoral, answer the question I posed. If you were today grievously injured, and you were given only $200,000, even though you would never be able to earn again, or regain anything close to your former earning capacity, would you be okay with that? Would not not feel bitter about losing much of your physical strength and capacity, your earning capacity, being reduced to a shell of your former self and being told that such was now your lot, with no effective compensation? Or could you be philosophical about it, saying, well, I rolled the dice by walking out the door this morning? Bad joss. Suck it up buttercup.


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## james4beach (Nov 15, 2012)

Well I agree with you that 200K liability coverage should be eliminated. Maybe 1M minimum, everywhere in the country.

Of course I wouldn't be OK with only recovering 200K if horribly injured. But I'm saying that society has established the current level (the law) and I don't think you can blame the OP for choosing the option he can afford.

By the way, I'm curious what you think of critical illness insurance. I've been looking into this. For example, as a cyclist, say I'm clobbered by a car and suffer a life changing injury. It seems to me that this kind of extra insurance is worthwhile. Thinking of buying a policy for 500K coverage that covers for a variety of conditions, including brain injury, or general loss of independent existence. The intention would be to help pay bills if I do get clobbered in this way, since I don't realistically expect to sue and recover that much (as you well know, you can't get blood from a stone)
https://www.sunlife.ca/ca/Explore+p...un+Critical+Illness+Insurance?vgnLocale=en_CA


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## Mukhang pera (Feb 26, 2016)

james, your post #40 got in while I was composing my last post, above. Your most recent post accords somewhat with my views. We should recognize that being on our roads is dangerous, terrible injuries can and do occur, and it should be part of the rules of the game that those who are injured receive just compensation. 

Of course, what is "just" is perhaps an elastic concept. Likewise, the can be differing views on how it should be funded. I believe it's still in place, the system brought in in Australia and NZ, doing away with the tort system for personal injury. Government took it over. No fault. If you get hurt, however caused and regardless of fault, you get money. 

I don't pretend to know what is best. But something strikes me as wrong when you have a system as we do, where you can have 2 similarly situated individuals, who get hurt in an MVA, yet the outcomes can be radically different in terms of compensation. Both can recover judgment for, say, $2 million and one ends up with that sum, while the other gets $200k. I recognize that that scenario won't exactly happen too often. Plaintiffs' lawyers know going in how much coverage is available and unless they see some prospect of something close to full recovery, from insurance or the defendant's assets, the advice to the client might be to simply settle for the policy limit and be done with it.


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## Topo (Aug 31, 2019)

I don't think the issue at hand is about how the victim/plaintiff feels. No doubt it would be devastating on multiple levels. The question is what does the law prescribe in such situations. On the one hand, the law gives the victim the option to sue for damages. A settlement may be reached or the amount may be decided by a judge in court. On the other hand, the same law, says that RRSPs are immune from these judgments and one could drive a motor vehicle without carrying additional insurance. The victim is allowed to ask for the maximum damages sustainable under law. This would not be immoral. Why would the defendant using protections sanctioned under the law be immoral?


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> By the way, I'm curious what you think of critical illness insurance. I've been looking into this. For example, as a cyclist, say I'm clobbered by a car and suffer a life changing injury. It seems to me that this kind of extra insurance is worthwhile. Thinking of buying a policy for 500K coverage that covers for a variety of conditions, including brain injury, or general loss of independent existence. The intention would be to help pay bills if I do get clobbered in this way, since I don't realistically expect to sue and recover that much (as you well know, you can't get blood from a stone)
> https://www.sunlife.ca/ca/Explore+p...un+Critical+Illness+Insurance?vgnLocale=en_CA


I think for someone like you, probably prudent to sign up.

I should mention as well, that in some (if not all) provinces, one can buy "underinsured motorist protection". With that coverage, your own policy limit will apply, if it is higher than that of the defendant.


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## james4beach (Nov 15, 2012)

Mukhang pera said:


> I think for someone like you, probably prudent to sign up.
> 
> I should mention as well, that in some (if not all) provinces, one can buy "underinsured motorist protection". With that coverage, your own policy limit will apply, if it is higher than that of the defendant.


Fascinating. Thanks. I've learned a lot from this thread. Should have been doing work instead, but this was probably more worthwhile.

I'm preparing to give a career talk at a school. My career talk may be under-prepared, but now I know more about what happens when you get clobbered by a car!


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## Mukhang pera (Feb 26, 2016)

james4beach said:


> I'm preparing to give a career talk at a school. My career talk may be under-prepared, but now I know more about what happens when you get clobbered by a car!


Maybe shop for under-prepared speaker's insurance?


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## Mukhang pera (Feb 26, 2016)

Fwiw, I should point out what most probably know, is that the owner and the driver of a motor vehicle that causes an accident are jointly and severally liable for damages. So there can be two or more pockets to dip into. With leased vehicles, the lessor will be sued along with the driver and, as well as requiring the lessee to carry more than minimum, leasing companies tend to be well-insured. Also, in multiple vehicle accidents, one can always sue everyone in sight in hope that will be some deep pocket to dip into.

In cases where multiple plaintiffs are injured (think the hockey bus crash) and the damages might run pretty high (unless the semi truck driver had all in well-protected RRSPs and could tell those kids and their families to pound sand), plaintiffs' lawyers have to be creative in finding ways to get paid. Governments (taxpayers) are always a good target. So, if required, one can always plead some government shortcoming that was the proximate cause of, or contributed to, the loss. Possible ploys are pleas of inadequate highway maintenance (such as inadequate snow/ice removal), or negligent highway design. In BC, the Crown has been held liable for rocks falling down mountains and hitting cars. BC has lots of mountains and rocks and the taxpayers are on the hook if they misbehave. See: _Just_ v. _British Columbia_, [1989] 2 S.C.R. 1228.

If running short of ideas as to where the money is, consider suing the manufacturer and distributor of the vehicle you were driving or in which you were a passenger. Volvo had to pay out $5 million to one BC couple (who no doubt would have been choked if told they would have to settle for $200k). See:

Hans v. Volvo Trucks North America Inc., 2016 BCSC 1155

https://www.bccourts.ca/jdb-txt/sc/16/11/2016BCSC1155cor1.htm


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## sags (May 15, 2010)

Bankruptcy only deals with unsecured debts. The insurance company could seize and sell any assets and apply the equity to the judgement debt even in bankruptcy.

_Bankruptcy can stop a wage garnishment, even one that is in process. It can also stop most creditors from taking money from your bank account, the only exception being if you bank where you owe money. However, bankruptcy does not deal with secured debts. That means if your creditor places a lien on your home or other property, they will be entitled to continue to seize and sell those attached assets even if you file bankruptcy._

https://www.hoyes.com/blog/filing-bankruptcy-to-avoid-judgment-or-lawsuit/


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## Longtimeago (Aug 8, 2018)

It looks like I did not communicate what I saw as the moral question adequately. I'll try to clarify since I think some posters are getting confused.

While we can argue that the minimum amount of coverage should be increased in line with current court judgements being awarded, that has nothing to do with what I was trying to say.

Let's say a judgement is made for $250k and the driver at fault had $200k of coverage AND $50k in an RRSP. The driver was found to be at fault, which to me means s/he is RESPONSIBLE for whatever judgement the court makes. If he has $200k in insurance coverage, fine, that amount is paid from there but he is STILL responsible for the additional $50k. Being allowed to 'hide' that $50k does not mean he gets to 'hide' his RESPONSIBILITY to pay the judgement in full. 

If the driver had no insurance and not a dime to his name anywhere, he is STILL MORALLY RESPONSIBLE to pay the judgement in FULL even if it takes working the rest of his life to pay it. No LAW can absolve anyone of their moral responsibility.

So the size of the judgement and what the law says you must insure as a minimum are in fact irrelevant to the question of moral responsibility. If you owe a debt, YOU owe it and are morally responsible to pay it in full. End of story.

Asking if you can legally hide $50k in an RRSP, is in fact asking if you can avoid that moral responsibility by hiding behind the law. The answer to that question is NO, you cannot avoid your moral responsibility.

I hope that clarifies the point for some readers.


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## nobleea (Oct 11, 2013)

Essentially, driving is a privilege, not a right. If you can't afford to do it properly, you can't afford it, period.
This means proper insurance, replacing tires and brakes when needed, heck even windshield wipers and proper emissions control.

Take transit, walk, move closer to work, or get a job closer to home otherwise.


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## sags (May 15, 2010)

Bankruptcy transfers moral responsibility for debts from the borrower to the lender who made the business decision to lend to that person.

It isn't the government's responsibility to act as a collection agency for businesses. The government's responsibility is to protect people, including taxpayers.

In the case of RRSP and pension protections, the government is protecting taxpayers from having to pay higher social benefits such as GIS to retirees in the future.


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## MoneySafe (Nov 24, 2019)

nobleea said:


> Essentially, driving is a privilege, not a right. If you can't afford to do it properly, you can't afford it, period.
> This means proper insurance, replacing tires and brakes when needed, heck even windshield wipers and proper emissions control.
> 
> Take transit, walk, move closer to work, or get a job closer to home otherwise.


This isn't about replacing brakes and windshield wipers. Its about insurance that costs more than the car itself in many markets. You can purchase a shiny, brand new, fully featured sedan and the payment of the car will be less than the insurance payment in many postal codes right across Ontario. That is as unjust as any other topic mentioned in this thread. These moral judgments aren't important, its just hot air for the sake of talking.

There is also a legitimate argument to be made to the quoted point that driving shouldn't just be a privilege for the wealthy and well connected alone, anyone should reasonably afford to drive on a basic income. These moral judgments that kept coming up are amusing, but it doesn't answer the original question posed, and its highly off topic.

Based on all the resources available, it appears if a civil judgment is issued (not a criminal penalty), bankruptcy should discharge it, and in Ontario RRSP contributions that are 12 months and older are protected. It does not matter whether a civil judgment is auto/insurance claims related or related to unsecured debts like a credit card, they are all "dischargeable" so far as I have been able to read since this topic was posted. The only exception to this are the rare circumstances that are specifically outlined in law (e.g. student loan debts under 7 years for example).

The only time something is not discharged in bankruptcy is when it is criminal in nature. For example, you are found criminally negligent and a court orders you to pay restitution of some type, that can't be discharged. But if its a civil case, it most certainly can. That's the only objective information I've found over the months this topic was asked.

Even though its been several months since the original post, I learned a bit from asking the question. I'm glad I came back for a refresh.


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## where's hunter? (Jan 27, 2021)

MoneySafe said:


> Unless I'm misreading as well, this appears to be an avenue to protect your savings from a severe judgment against you. So you aren't actually destroyed for life, bankruptcy does protect.
> 
> To be honest, my $50k+ in an RRSP, as long as it is safe, I could care less if the $2-5k or whatever I was able to save in the past year was less safe. As long as a life savings isn't stolen from me due to an accident that is not intended, that is the important thing!





MoneySafe said:


> Hello all,
> 
> I hope there are some legal minds on this forum that could shed light on this topic. I am seeking a drastic reduction in my auto insurance payment by reducing coverages to the bare minimums. The value in my car is not worth paying for any extras, so I intend on purchasing just the minimum. In Ontario, the Liability for property/damages is $200,000.
> 
> ...


just cash out and put it under the mattress in $100 bills or gold bars if things go wrong


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## Beaver101 (Nov 14, 2011)

^ You still need insurance for fire or theft to protect those things so either way, not sure how much the OP can really "save" at the end of the day, let alone being able to have a good night sleep.


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## latebuyer (Nov 15, 2015)

I’m confused how the new insurance in BC affects liability insurance. Do you still need it or are you covered by the government?


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