Money question rrsps and loans hurting: Hi Everyone,
I took out a loan for my X...and since it's in my name - I am stuck with it.
Long story short - he has missed 4 or 5 payments and now the loan is 1400.00 in arrears..It's very high interest.
I was thinking of cashing in my rrsps to pay for it...But how will that work when it comes to doing my taxes? it would be about 8000.00 or so. I have been saving rrsps for about 5 yrs now to buy a house - but I will never be able to buy one until i pay this debt off anyways. I don't have any other debt and I make about 55000 a year. I don't want to go into debt consolidation because that is on my credit for 3 yrs after I make the last payment. I just can't see myself getting ahead on this loan.
Any advice??
Re: Money question rrsps and loans Bubba: Do you have any insurance with a Cash Value? I would check there first. If not, if you take from your RRSP's the amount you take out will be considered part of your income for this year. Of course once you get it paid you could take out an RRSP in Jan/Feb to balance out what you took, therefore avoiding the taxes.
Bubba
Re: Money question rrsps and loans sourpuss: i wouldn't cash those rrsps in unless absolutely necessary.
you will be taxed on that withdrawl, and it will be at a rate that could be as much as 30% (check revenue canada's website for the rate).
do you have a financial planner? someone at your bank? there might be options you haven't thought of.
you don't say what the loan was for, is it something that can be repossessed, or that the ex can be forced to sell? you need to avoid this happening again......
