What happens to my tax refund in a bankruptcy or proposal?
If Canada Revenue Agency (CRA) is one of the creditors in a bankruptcy, any refund you are entitled to, for the year of bankruptcy and any prior year, may be retained by CRA to offset the amount owing. After discharge, any debt still outstanding to CRA which formed part of the bankruptcy, cannot be recovered by CRA. Post-bankruptcy Income tax refunds are property of the estate and any subsequent income tax refund may be retained by you.
If CRA is one of your creditors in a proposal, any refund you are entitled to, for the year of the proposal and any prior year, may be retained by CRA to offset the amount owing. You are entitled to all future income tax refunds.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
