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tax refund and personal bankruptcy

If I receive tax refund for tax year 2007 (example:$2000) in March2008, and, in May2008, I file bankruptcy. Will my unsecured creditors (or Licensed Insolvency Trustee) ask me to surrender this tax refund of $2000?

If I file bankruptcy in May2008, definitely there will be 9 months before discharge, so let`s assume that I will be discharged in March2009. In March2009, I file tax return for year 2008, If I receive some amount of tax refund, for example, $2000, Will I surrender this money to trustee for dividends to creditors?

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One Response to “tax refund and personal bankruptcy”

Barton Goth GCO Bankruptcy Trustees said...

When you file bankruptcy you are permitted to have a reasonable amount of money in your accounts to satisfy your normal expenditures. If you have any money in excess of this (i.e. money from the 2007 tax refund) this will likely be lost.

As for the 2008 refund. As part of the bankruptcy this is assigned to the trustee for use as perscribed by the Bankruptcy & Insolvency Act. So regardless you will loose the the full amount of any refund pertaining to the year you file bankruptcy.