Personal Bankruptcy & Filing Late Tax Returns

Late Tax

Table of Contents

Some of the people who file for Personal Bankruptcy with David Sklar & Associates have not filed their income taxes for several years. In general, this is a reflection of the financial chaos that their lives have become.

There are many reasons people have for not filing – but they seem to fall into five main categories:

  1. Fear that they owed the government money they could not pay
  2. Kept putting it off
  3. Lost their tax receipts/information slips
  4. Were intimidated by the whole process
  5. Did not know how to get help

Whatever the reasons for not filing, when a person files for Personal Bankruptcy they must bring their individual tax filings up to date.

Part of the duties of the Bankruptcy Trustee includes:

  1. filing Income Tax Returns for the year prior to the bankruptcy (if they have not been filed); and
  2. filing a pre-bankruptcy tax return for the period January 1st of the year the bankruptcy is filed into the day before the actual date of the bankruptcy.

In addition, DSAI also files post-bankruptcy tax returns for most of their clients. The post-bankruptcy return is for the period from the first day of the bankruptcy, to the 31st of December for the year the bankruptcy was filed in.

As part of the Bankruptcy process, the Canada Revenue Agency (CRA) is informed that a bankruptcy has been filed. If there are unfiled tax returns, the CRA will send a ‘demand’ letter insisting that the tax reporting be brought up to date.

In the case where a person in Bankruptcy (a bankrupt) has not filed their Tax Returns for several years, DSAI will recommend several firms that can complete your Tax Returns for you.

Here are some of the most frequently asked questions about late income tax filings:

What if the tax receipts and records are missing?

Good news, CRA has copies of all your income and official tax receipts/information slips – and will forward them, if requested, for processing.

This is important to note – even if you are not in bankruptcy, you are able to get copies of tax receipts that you have lost, from the CRA.

What happens if there are rebates on a bankrupt’s late tax returns?

If there has been no fraud, tax rebates will normally go into the individual’s bankruptcy estate as assets for disbursal among the unsecured creditors.

What happens if there are taxes owing on a bankrupt’s late tax returns?

If there has been no fraud, they will normally go into the individual’s bankruptcy estate as debts and will be covered by the bankruptcy.

What does all of this mean to people in Personal Bankruptcy?

In most cases, getting their tax returns up to date brings a sense of relief. This is part of the process of getting the ‘fresh start’ that is the goal of bankruptcy.

In some cases, it can result in the individual becoming aware of credits such as GST and disability credits, that they will qualify for after they have been discharged from their bankruptcy. These individuals can look forward to any such benefits in the future.

Final Note: Whether or not you are contemplating Bankruptcy – keeping your tax filings up to date is strongly recommended.

Photo by RODNAE Productions

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

Share This!

I worked primarily with Christine, who was very friendly and outgoing. She was quick to help me, and explained everything I needed to know very well. She's quick to answer any questions I may have as well. The other members I spoke with were also very kind and jovial, and were happy to help me with anything they could. They made sure my proposal fit within my budget, and got everything going very quickly. I was happy to work with them, and would highly recommend their very friendly service!
Melissa McAllister
1695841291
Very processional and understanding of my situation. Thanks to all your team.
Luc Valade
1695320109
Jennifer Norton's exceptional assistance with my consumer proposal was life-changing. Her professionalism, expertise, and dedication were evident from the start. Jennifer's thorough explanations and attention to detail created a tailored proposal that set a clear path to financial freedom. She went above and beyond, advocating for my best interests and providing invaluable support. Thanks to Jennifer, I'm on track to a stress-free financial future. I wholeheartedly recommend her – she's not just a financial expert; she's a life-changer. Thank you, Jennifer!
Thomas
1695089142
They made a difficult situation, easy thank you.
Ray Barkley
1694806611
I had a great experience with Christine from David Sklar & associates. Very professional, and easy to get through. Thank you
fukinwith doug
1694804075
Great customer service and a smooth process to get your finances on track. Informative and thorough.
Adrian Downey
1694799042
From the moment I sat down in the office, I felt welcome and at ease. Grace Cuffaro was both friendly and highly informative. She is extremely knowledgeable and answered all of my questions in detail, making sure I understood before moving on. I was reassured throughout the process that I was making the right decision and that it was not uncommon nor anything to be ashamed of. I didn't expect my appointments to be such positive experiences, but that's exactly what they've been!
P Bains
1694670814
I was in a tough financial position and found myself searching for relief. I came across David Sklar & Associates page when doing my research on financial advice. The reviews were amazing, but I was concern because I didn’t know what to expect. I made the decision to set up a consultation and had the pleasure to meet with Jennifer Norton. Right from the beginning, she was attentive, knowledgeable, and pleasant to meet with. The experience was painless and very educational. Jennifer made sure I understood my choices, answered my questions, and concerns promptly, in person, over the phone and via email. I’ve been working with Jennifer for a couple months now and I am pleased that Jennifer is the manager handling my file. I would and have recommend Jennifer Norton, David Sklar & Associates to anyone in need of direction regarding finances.
A.L Thompson-Lawrence
1694547608
I had my first meeting with Jennifer, she was really understanding and extremely helpful, and got everything done in a timely manner.
Tamas Wint
1694534757
Jennifer Norton has been the most helpful throughout this truly embarrassing situation that I find myself in. She is informative, understanding, and there is absolutely no judgment. She has handled everything in a very professional and respectful manner and I am SO glad that I have them on my side. Definitely a huge weight off my shoulders.
Jody T
1694533927
js_loader
DS david skalr icon

Book your free consultation.

Call 1-844-962-9200 or fill out the form below. We’ll do the rest.

Contact Us