Filing Your Income Tax Return After Bankruptcy

Updated:  March 1, 2022

As part of the bankruptcy process, your Licensed Insolvency Trustee must file your income tax return for the year of bankruptcy and any returns due during the calendar year before bankruptcy.

The Trustee will break your income tax return into two portions based on the bankruptcy filing date. The first portion is referred to as the pre-bankruptcy filing; this covers January 1 until the date of bankruptcy. The second portion is referred to as the post-bankruptcy return and covers the day after you filed for bankruptcy until December 31.

Any tax refunds for either of the above periods will come directly to your bankruptcy estate and be distributed to your unsecured creditors who have filed a provable claim.

Your bankruptcy will discharge tax debt from the pre-bankruptcy portion of the return. However, post-bankruptcy tax obligations will be your responsibility as they are considered new debt incurred after the bankruptcy date.

Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of significant financial stress;

• You won’t be stuck in an assembly line process.

• You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.

• We will review your debt solution options, including filing a consumer proposal or personal bankruptcy.

• We help Canadians with overwhelming debt get fresh financial starts.

Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.

We offer free consultations to review your financial situation and practical debt resolution options.  Contact us to discuss your situation over the phone, a video chat, or in-person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.