GST/HST Rebates and Bankruptcy in Ontario

How Filing Bankruptcy in Ontario Impacts GST/HST Rebates

Filing for bankruptcy is a challenging decision that carries several implications. In Ontario, one of the repercussions involves the handling of GST/HST rebates. This article provides a detailed overview of how these rebates are managed during bankruptcy.

Understanding GST/HST Rebates

In Canada, the GST (Goods and Services Tax) and HST (Harmonized Sales Tax) are federal taxes applied to the sale of goods and services. Individuals and families with low and modest incomes can receive GST/HST rebates to offset some of these costs.

Bankruptcy in Ontario

When an individual is unable to meet their financial obligations, they may resort to bankruptcy. This legal process releases them from most of their debts, but it comes with consequences, including the handling of their GST/HST rebates.

GST/HST Rebates & Bankruptcy

When you declare bankruptcy in Ontario, the handling of your GST/HST rebate changes. Normally, this rebate would be sent directly to you. However, during bankruptcy, these rebates are automatically sent to your appointed trustee.

Role of the Trustee

The trustee is a qualified individual or corporation appointed to administer your bankruptcy. In relation to GST/HST rebates, the trustee receives these funds on your behalf. The funds form part of your estate, which is then used to repay your creditors.

How Funds are Distributed

The GST/HST rebate contributes to the pool of funds that the trustee uses to pay your creditors. After your bankruptcy is discharged, any leftover funds are returned to you. This process ensures that your creditors receive at least some of the money you owe them.

Exceptions to the Rule

While the standard procedure is for the trustee to receive your GST/HST rebate, there can be exceptions. These are case-specific and need to be discussed with your trustee or a legal professional.

Contacting a Trustee

If you’re considering bankruptcy or have already filed, it’s important to consult with a trustee. They can provide detailed information specific to your case, including any potential exceptions regarding your GST/HST rebate.


Understanding the relationship between GST/HST rebates and bankruptcy in Ontario is crucial for those considering this financial step. It affects the way your rebates are handled, and ultimately, how your debts are repaid.

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