Retro pay
Hi , i have filed for bankruptcy a month ago. I have just leaned that I may recieve retoactive pay from my previous job in 2007. I will be respnsible to pay the income tax as none will be deducted. I know I have to report this, but will all of this have to go back to my estate even though it was money from working in 2007?
Posted from: Nova Scotia
It will be up to your trustee to decide is this retro pay is “income” and therefore subject to the surplus rules (partial seizure) or if it is a windfall and subject to 100% seizure. The law is felxible enough that trustees treat this kind of payment both ways – you’ll need to call your trustee and ask them how they will treat it…