Filing Your Income Tax Return After Bankruptcy

How to Handle Your Income Tax Return Post-Bankruptcy

Dealing with Taxes After Bankruptcy

The process of Filing Your Income Tax Return After Bankruptcy can be a complex one. It involves certain critical steps and the involvement of a Licensed Insolvency Trustee. This article aims to provide a comprehensive guide on how to navigate this task efficiently.

Understanding Bankruptcy and Income Tax Returns

Bankruptcy is a legal proceeding involving a person or business unable to repay their outstanding debts. During bankruptcy, your Licensed Insolvency Trustee plays a crucial role, including filing your income tax return for the year of bankruptcy and any returns due during the preceding calendar year.

Pre-Bankruptcy and Post-Bankruptcy Returns

Your income tax return is divided into two parts based on the bankruptcy filing date:

 

  • The pre-bankruptcy filing, covering January 1 until the date of bankruptcy.
  • The post-bankruptcy return, covering the day after you filed for bankruptcy until December 31.

 

Tax refunds from either period are directed to your bankruptcy estate and are distributed among your unsecured creditors who have filed a provable claim.

Discharge of Tax Debt

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

Role of a Licensed Insolvency Trustee

A Licensed Insolvency Trustee at Bankruptcy Canada is an experienced insolvency practitioner who understands the personal impacts of significant financial stress. We offer:

 

  • Personalized attention, ensuring you are not stuck in an assembly line process.
  • Prompt responses and resolution of issues from a supportive and experienced team.
  • A review of your debt solution options, including filing a consumer proposal or personal bankruptcy.

 

Filing a Consumer Proposal or Personal Bankruptcy

Once you file a consumer proposal or personal bankruptcy, your Licensed Insolvency Trustee deals directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you.

Consultation Services

Free consultations are offered to review your financial situation and practical debt resolution options. You can contact Bankruptcy Canada to discuss your situation over the phone, a video chat, or in-person in cities across Canada.

In conclusion, while Filing Your Income Tax Return After Bankruptcy may seem overwhelming, with the right guidance and support from a Licensed Insolvency Trustee, you can successfully navigate through this process and start afresh financially.

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