Filing tax refunds after bankrupcy

January 4th, 2007 by Questions

Can you explain why the trusteeswill keep the income tax refunds and GST credits, even when their is not more debt owed to the creditors? Can I go to any Income tax preparation company for them to do my tax return?

Questions

One Response to “Filing tax refunds after bankrupcy”



January 05, 2007 at 11:52 am, A licensed trustee said:

I think you may want to go and have a chat with your trustee about your taxes and GST – it sounds like you may have misunderstood something that you were told.

When you file bankruptcy any tax refunds that you may be entitled to for the period BEFORE you filed automatically become the property of your bankruptcy estate (for the benefit of your creditors).

In addition, some trustees will ask you to voluntarily agree to allow any tax refunds that you may be entitled to receive for the period after you file until you are discharged to also be paid to your trustee (for the benefit of your creditors). You are legally required to do this, but many people do.

In regards to your GST, it will also be redirected to your trustee while you remain bankrupt or until your trustee instructs the Canada Revenue Agency to stop sending the trustee your cheques.

There is a point afterwhich your trustee may be required to return your GST to you and there is even a point (after your claims have been paid in full) that your tax refunds may be returned.

Again, I suggest you go and see your trustee and ask them to explain all of this to you again.

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