How much can the trustee take?

January 27th, 2015 by Questions

my friend went bankrupt for $19,600.
he just found out he qualified for a disability tax credit. If he get $20,000 back, does the trustee get all the amount or just $19,600

Posted from: Nova Scotia

Questions

One Response to “How much can the trustee take?”



January 27, 2015 at 10:56 am, NSS Admin said:

In the event that the bankrupt is eligible to receive a disability tax credit for income tax returns from the taxation years before the date of filing the bankruptcy then the total amount of the funds will be sent to the Trustee as part of the bankruptcy estate. It is impossible to know what will happen to these funds without having more information about the bankruptcy estate itself. In general, the creditors are entitled to receive the full amount owed with interest at a rate set by the Courts of Justice Act in your province. Funds are usually not distributed until the administration of the estate is complete.

Your friend may receive a portion of these funds back if his creditors did not all file the appropriate paperwork to receive funds from the bankruptcy or if the bankruptcy estate has other funds available from current tax returns or voluntary payments. These are just some considerations that will affect whether your friend will receive any of these funds. The Trustee that is responsible for the bankruptcy will be able to provide a more specific answer to this question.

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