frustrated and very confused

June 5th, 2010 by Questions

My common law partner and I claimedbankruptcy last may 2009, we are have been paying 300 a month and were supposed to be discharged in December 2009, when the time for discharge came along we recieved paperwork stating they required us to pay a further $2500. i was shocked at this news, it turns out our trustee knew our payments a month should have been more yet he never brought this to our attention we could have afforded to pay the extra over the nine months as my husband and i were both working unfortunately I got laid off in the winter when we recieved the news of the extra debt owing. Why is that? Also why do we lose all our tax returns, and will we lose the new hst credit as well? the company we filed through did our taxes as well and this is the first year we have ever had to owe the government is this also because of our bankruptcy?

Megan

Posted from: Ontario

Questions

One Response to “frustrated and very confused”



, A licensed trustee said:

It sounds like either you misunderstood what you were told when you filed last May – or you weren’t told everything you needed to know.

Let’s start with the taxes – by law when you file for bankruptcy any tax refunds for the year you file, plus any previous years, are paid to your trustee for the benefit of your creditors. This seems to cause people at lot of grief, but it’s simply part of the cost of filing. Sorry, but there’s no help for this – the refunds are gone.

Second, if you filed in May of last year then there’s no way for your bankruptcy to have ended in December. The minimum length is 9 months which would have put you into February (maybe March depending on the dates).

Finally, the extra $2,500 – I am assuming this is an obligation to pay under the Surplus Income rules. Briefly, your trustee should have explained to you that the law requires additional payments when you file for bankruptcy if your income is over certain set amounts (which depend on family size). Everymonth you are required to report your income to your trustee and they then determine if an extra payment is due. Many trustees wait and tell you the total near the end (which I think is stupid, but it is permitted under the law).

If all of these things were explained to you last May then there shouldn’t have been any surprises. If you don’t think they were then you should either meet with your trustee to discuss your concerns or contact the Office of the Superintendent of Bankruptcy and speak to them about your situation.

A word to the other forlks reading this site – make sure you understand all of your duties BEFORE you file for bankruptcy. Your trustee should be able to provide you with written instructions on what it is you have to do and when you are supposed to do it…

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