Income tax refund

We filed for Bankrupcy last year (March 2006) and at that time our trustee told us that our Income Tax refund at the end of that year would be up to us if we would recieve it or not. We fulfilled all our obligations, paid $330 a month for all nine months even though our income was below the guideline income for our family. Now that tax time is here our trustee says we will not get our return. Is this right? Also, when we filed he advised us that our children’s income from my CPP disability pension would not be part of our family income but then it was included every month anyhow (but even with it included we still fell below the income guidelines so we didn’t make a big deal about it.) Now we feel we should be entitled to our income tax refund for 2006 if there is one to help us get back on our feet. Can you advise us please?

One Response to “Income tax refund”

A licensed trustee said...

We see a lot of variations on this question at this time of year – tax season.

Whether or not you are entitled to your POST-bankruptcy tax refund depends on whether or not you signed a document assigning it to your trustee when you filed bankruptcy. If you did, then your trustee has the right to seize it for the benefit of your unsecured creditors. If you did not then your trustee does not have the right to take it.

If you are unsure then you may either ask your trustee to show you the document or you may contact the Canada Revenue Agency and ask them if your POST-bankruptcy tax refund has been assigned to your trustee.

It is possible to withdraw or revoke the assignment, but you will need to speak to your trustee to do so. If your payments have been based on the refund goignto your trustee and you no longer want them to, it may mean that you will owe your trustee additional money.

Unfortunately, without a detailed review of your bankruptcy there’s no way for me to tell. I suggest you go and speak to your trustee – if you still feel that you’ve been mistreated somehow then contact the Office of the Superintendent of Bankruptcy and ask them to review your case.