Tax Refunds

January 25th, 2010 by Questions

I understand that a bankrupt loses their tax refund for the year that they file for bankruptcy, but what happens in the following year if they are still in the bankruptcy stage?

For example, I filed for bankruptcy in June of 2009 and will lose my tax refund (if I have one) when my trustee files my taxes for 2009. But what happens next year when I file for my 2010 taxes and I happen to have a tax refund, considering I will have still been bankrupt in the first 3 months of 2010?

Posted from: British Columbia


One Response to “Tax Refunds”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

You are correct that there is an impact on ones taxes when a bankruptcy is filed in Canada.

But ultimately what is important is the year you filed for bankruptcy. You will loose any refunds that are due to you up to and including the year you file.

So if you file for personal bankruptcy on Dec. 24, 2009, regardless of when you receive your discharge, you would loose any tax refunds for 2009 and any preceeding year (should their be any outstanding returns).

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