Bankruptcy was not necessary

November 8th, 2011 by Questions

I went bankrupt on the advise of my trustee as I was assessed by CRA to owe $80K in taxes (amounts were set by CRA as I hadn’t filed my taxes in years). My trustee was supposed to file my back taxes but it wasn’t done and he lost my paperwork for 1.5 years during my bankruptcy. When I finally found out, had someone else do my taxes and now instead of owing $80k to CRA, THEY are the one that should have paid me back around $10K as a result of the reassessment. My bankruptcy had told me not to pay my mortgage as CRA had a lien on my house, and as a result I was foreclose on my house as well. Are there any recourses in this type of situation from Trustee mismanagement?

Posted from: Alberta

Questions

One Response to “Bankruptcy was not necessary”


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

You probably won’t like my answer, but you may not find that you have much of an argument. Now, if you are concerned with the conduct of your trustee you can always discuss this with the Office of the Superintendent of Bankruptcy. But for what it is worth you may have a difficult time suggesting the trustee is at fault when you were the one who hadn’t filed the taxes and came to the trustee and represented this $80,000 as owing to the government for these taxes. The trustee must base his advice on the information you provided to him at the outset of the engagement, so I think you will find it difficult to suggest that there was mismanagement. Now I can’t speak to the loss of information and the delay in taxes, but if you disclosed this level of debt as being representative of what you owe, the trustee’s advise was likely correct based on the information provided.

For others reading this post, this is why it is extremely important that you know where you sit before you contact your trustee. The trustee doesn’t have access to any more information than you provide to them and therefore their advice and the quality of this advice is dependant on the quality of information you provide. So be careful, and make sure the information you present is in fact representative of what is actually happening.

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