Confused
When I filed Bankruptcy, my Trustee advised the fee would be $2000, paid at $100 per month.
Since then my HST chq’s have went to the Trustee towards my $2000 fee. I have now been advised that my income tax refund in the amount of $1365.00 for 2012 will be taken by the trustee, however, it will not be applied to my $2000 fee, but be dispersed to the creditors. I had no assets or monies at the time of Bankruptcy. I thought the agreed upon amount at the time of bankruptcy was the total amount to be paid. Now I am advised my income tax refund will be shared by the creditors and not used to pay the original fee. Is this correct?
I work making 10.75 per hour and get approximately 28 hours per week.
Posted from: Ontario
The normal cost to file for bankruptcy in Ontario is about $1,800. Unless your trustee decides not to take your HST cheques (we don’t take them for example) they will automatically be forwarded to your trustee while you remain bankrupt, BUT once your trustee collects more than $1700 towards your bankruptcy they are required to return/refund your HST – that’s why we don’t bother take it.
Tax returns and assets that may be seized are something different altogether. These are things that will be seized for the benefit of your creditors and are not applied to the basic fee you agree to pay. Your trustee should have explained to you that you’d lose your tax refund for the year your filed and any previous years you may be entitled to receive. If you don’t think you were told all of this you should go and speak to your trustee – you may be able to “guilt” them into reducing your fee payments.