We answer general personal bankruptcy and personal proposal questions on our Ask a Bankruptcy Trustee Blog. When we get a question that a number of people ask and/or a question we think will be of general interest we feature it on its own blog and give a more detailed explanation.
QUESTION ASKED BY Marilyn:
April 22nd, 2006 at 4:54 am e
Does a bankrupt that has not been discharged( November 12/2004-present)
have a choice in were the 2005 income tax return is prepared ? The 2004 return was prepared by the trustee.The relationship has deteriorated and the bankrupt would like to have the return prepared by someone else.
Thank You
ANSWER:
April 22nd, 2006 at 10:55 am e
Marilyn: The trustee will not prepare any tax returns subsequent to the year of bankruptcy. It is the bankrupt’s responsibility to prepare these.
DETAILED ANSWER:
When a person goes into bankruptcy all his assets except the equity in assets exempted by the person’s province or territory of residence “vest in” or belong to the trustee. Income tax refunds, as at the date of bankruptcy, are assets that vest in the trustee. In addition, the trustee will ask the person to assign the post bankruptcy tax return (the tax return for the period from the date of bankruptcy to December 31st.) to the trustee for the benefit of the bankruptcy estate.
Note: If the post bankruptcy tax return does not result in a refund the bankrupt will be responsible for paying any income tax owing since the debt arose after the date of bankruptcy. The trustee may require the bankrupt to file this return if there is no refund available.
It is the duty of the bankrupt to provide the information to the trustee so the trustee can prepare the necessary tax returns.
The trustee is obligated under the Bankruptcy and Insolvency Act to file tax returns for the prior year’s tax returns (year prior to the year of bankruptcy) and the pre bankruptcy’s tax return (for the period January 1st. to the date of bankruptcy) regardless of there being a tax refund available.
Tax returns for the years following the year of the bankruptcy are the responsibility of the bankrupt to file.
Can a bankrupt with a discharge after 9 months with no conditions keep a tax refund if any for the next tax year? I will file my own paper return next year. Will the return go to me or the trustee? Does the trustee have any legal right to keep it? Thankyou
If one declares bankruptcy during one calendar year (let’s say October 2007), but has not yet filed income tax returns for previous years (say 2006 and 2005), who is responsible for filing the overdue returns and who receives any refunds from these pre-bankruptcy years? Also, since the discharge from bankruptcy would not occur until well into the next year, 2008, is the Trustee responsible for filing that return as well (and does the trustee receive any refunds owed)?
I am an Ontario resident and I work in the US. I claimed personal bankruptcy in March and included CRA as a creditor based on an estimate of my 2006 taxes. As it turns out, I am getting a refund. I assume that I must give over the refund to my trustee this year. What about my US tax return? I am getting a significant tax refund due to the outcome of my divorce. Do I have to give my US tax refund to the trustee as well? or can I defer some of my tax savings until next year if allowed in the US?
How many years must I give my tax refunds to the trustee? My trustee is on vacation for 2 weeks and I am unable to get an answer; we had not discussed the matter as it was estimated that I would owe in stead of getting a refund.
Please advise.
I filed bankruptcy Apr 1 2007 and I run a small business (non-incorportated). I had business losses in the pre bankruptcy periiod although other pension income gave me a profit. The pro-rated taxes paid on my pre-bankruptcy pension, Jan to Mar, was well above the amount needed since the year ended abruptly, thus resulting in a refund based on the exessive tax paid. I understand that this refund goes to the Trustee. When completing the post bankruptcy return containing a business profit, can I in anyway consider consider my pre bankruptcy business loss. Otherwise it appears to be double jeopardy because under a normal tax year, losses and profits in business are both used.
if you have filed for personal bankruptcy when filing taxes my bankruptcy firm did the pre and said I was responsible for the Post. When I went to get my taxes done, they informed me that the bankruptcy firm legally has to do the Pre and Post for that first time. The bankruptcy firm says I am responsible for the post, also when they did the pre they didn’t claim any health tax, and said I have to claim on my Post for the whole year??? Is this also correct?
THanks
Kelly
my common law husband and i are considering going bankrupt. he is filing personally and i have an income tax refund coming. will his bankruptcy interfere with my return
i have one more question, are the arrears of a separation agreement included in the terms of a bankruptcy? that is what has put us here in the first place
Does a personal remain qualified for provincial rent-geared-to-income housing if they intend to file for bankruptcy before a unit is actually offered?
Hi I’m a Canadian studying in a US dental school. Over the last 4 years I have accumulated over $10,000 in US debt. If I file for bankruptcy in the US, how will this affect my Canadian credit. Will I be able to take out business loans once in Canada. What role does the CRA play in this?
Thank in advance for your help
I just recently was discharged as was my friend. He is receiving his refund from his personla income tax return on his post bankruptcy return. Am I allowed to have someone other than the trustee do my post and recieve the refund if any??? I am a little confused because some trustee have different information
please help
Thanks
I was just recently discharged, before my 2008 tax filing is due. Will I receive a return because I am a low income single-father who attends school full time. My house contains me and my three children. I filed for my tax return for 2007 before I considered bankruptcy and the seperation. Actually the bankruptcy was due to the seperation. To make a long question short, will I get a tax return, because I know there will be one. My bankruptcy agent is hard to get a hold of to ask these types of questions.
Hi
I am a US citizen who studded and lived in Canada and I have Canadian student loans. I am leaving Canada to return to the US, if I file for Bankruptcy in Canada will it effect my credit in the US?
Hi there,
I went bankrupt in April 2009 and was self employed.
I have recently received a phone and went to a follow up interview with the RCMP who had 5 of my former customers complaining they did not receive their product from my business. These customers are from outside Canada.
Does my bankruptcy protect me from any criminal charges?
I filed for bankruptcy with trustee Aug 2008 and they still have not filed my 2008 taxes,pre or post bankruptcy.
Now my Child tax benefit is on hold . How can I get them to file. I am a single parent with health issues and rely soley on my fixed income. I was also told I would receive the discharge papers and have not.
hello. I have a large debt with revenue canada from a previous small business. Currently, my wife and I have formed a new business and although we have not done very well lately, the company has some assets. The debt is mine alone, and the corporation is owned jointly by my wife and I. What happens to the new company’s assets?
I was contacted recently by a Canadian company who filed bankruptsy in 2009. They want to purchase product from our company because the end user in USA ( who was our original customer ) was concerned about doing business with them. They have indicated that they will wire money prior to our release of the goods however we are unsure whether they would have rights to those funds depending where they are in the process. We don’t know whether to approve the transaction or not. Would love to get your input.
My daughter and her husband are going bankrupt. I understand that they cannot have a vehicle worth more than $5,000. He is a self employed carpenter who will most likely end up an employee. My question is can I buy them a vehicle which is worth more than $5000. and gift it to them? Can they own 2 vehicles each worth less than $5000 if one of those vehicles is a gift? They reside in British Columbia as do I.
I filed for bankruptcy in March of ’09, after I had already filed and spent my return. This will be my first tax season being bankrupt. My personal finances are dismal and I have defaulted on several payments to my trustee as they and I are failing to see eye to eye on my ever changing payments which are apparently more than 200% what I should be paying, according to another financial advisor. With my present situation, I could really use my tax return, but I know that if I speak to them about it they will not allow me to. If I go to a quick tax place with instant refunds, can I keep my refund and just default on the payment of it to my trustee?
I bought some penny stocks 10 yrs ago from a company that was not on the stock market, the company is still not on the stock market and probably won’t be for quite a few years if ever.
Do I have to add these as assets if I go bankrupt?
Me and my common law husband are looking into bankruptcy. He makes 2300 after taxes per month and I am currently on EI making 1088 per month. I am a student so I am not working. My EI runs out in March. If we file bankruptcy now with my EI will we pay more or should we try to hold off until I have no income?
Thank you
My husband was discharged from his bankruptcy in oct of 2010..HIs trusty did up his incometax last year and are required to do up the 2010 income tax as well..My question is where they kept his return last year and were sending us his gsts as his return was large enough they didnt need it… we were wondering if they would keep this income tax as well or if it would be sent back to us?
Thank you
I was discharged from Bankruptcy since last year (July 2010) but not my Trustee up to now. I filed my own tax return last month and will be expecting a refund. Will i get this whole refund? or will the Trustee have every right to collect it just like last year?
My husband and I declared bankruptcy last April 2010 and we were discharged Feb 2011. Our trustee filed both our Pre and Post bankruptcy taxes. We were told that we should be receiving our post bankruptcy tax return but our trustee is saying that both of them go to the estate. Can you clarify if we should be receiving anything.
Thanks
My husband and I made just $15000 during his bankrupcy year. We were not married at the time. The pre-bankruptcy was completed by the Trustee and we just finished a large battle with CRA to complete our post bankruptcy return (they were 9 months late and paid us interest). We were told that we would get the return but they mailed it to the trustee.
The deductions at source were large and the post return is a refund of $1450. Income was only $7000. That is 20% of our income having left us with only $466 a month to live.
We paid the trustee a monthly fee and was told the post was ours. Do we have any claim to the funds?
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