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Back Taxes After Discharge

I was discharged from bankruptcy and my post-bankruptcy refund has been sent to my trustee. I have emailed them about this, as I was told that once I`m discharged, I will receive this refund. I have several years pre-bankruptcy that I did not file. They would all be refunds. Would I still receive these refunds as I am not in bankruptcy anymore? My trustee filed my 2007 return and my pre-2008 return. I filed my post-2008. The past returns are for 2006 and earlier. Thank you.

Posted from: Ontario

One Response to “Back Taxes After Discharge”

A licensed trustee said...

Here’s what you need to know about your tax refunds:

1) any tax refund that relates to the period before you filed for bankruptcy will be sent to your trustee no matter when you file the return. So, if you filed for bankruptcy in 2008 then the PRE bankruptcy period of 2008, plus 2007 and every other year before 2007 will be sent to your trustee;

2) On July 7, 2008, the government brought into force a new provision in bankruptcy law effectively making the POST bankruptcy refund the property of your creditors (ie it will be automatically sent to your trustee). This change was made in 2008, but the trustee community wasn’t informed about it until March 2009. I know in our practcie we were telling people (up until March 2009) that they could keep their POST refunds – we later discovered this was incorrect. The government is automatically mailing all POST refunds directly to the trustee in all bankruptcy cases; and

3) Unless you specifically assign (sign over) your future refunds (ie 2009 and beyond) they will be sent to you. Your trustee has no legal right to these refunds unless you give them this right.