Bankruptcy – Income Taxes

Duties of a Bankrupt: Income Taxes

Trustees have a duty to complete a pre and post bankruptcy income tax return for every bankrupt.  For example, if you declare bankruptcy on May 10, 201X, your Trustee will prepare a pre-bankruptcy return from January 1 to May 10, and a post-bankruptcy return from May 11 to December 31.

If you haven’t submitted your tax return for the year prior to your bankruptcy your Trustee is also required to complete this return.

Your duty is to provide your Trustee with the tax information to allow them to prepare your returns.

Refunds

The Canada Revenue Agency will automatically forward your income tax refund in the year of your bankruptcy to your Trustee to be distributed among your creditors.  Refunds for any other tax returns completed by your Trustee will also be forward to your Trustee.

Any refund generated in the years after you bankruptcy are always yours to keep.

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