Personal Bankruptcy and Filing Late Tax Returns

Filing Late Tax Returns

Filing Late Tax Returns & Personal Bankruptcy

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; and
  5. Did not know how to get help.

Whatever the reasons for not filing, when a person goes in to 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 in to 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 a Bankruptcy – keeping your tax filings up to date is strongly recommended.

 

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We worked with Jackie. She is very professional and very caring. She is quick to respond and really cares about helping the people in front of her. I went with my uncle, who was scared of the whole process and mentally delayed. Jackie took her time with us and made him feel at ease. She carefully explained things multiple times and was very encouraging. She was a shining light in a difficult process.
stefania cicchino
13:54 27 Mar 21
Jackie is very professional, kind, supportive and super helpful. She was able to help me get back on track. Great service and I will definitely recommend them.
Christine Lowe
16:44 12 Mar 21
Jackie provided me excellent service, was very helpful, and she made feel very secured and she listened to all my concerns.i was speechless with excellent service.
Belen Trava
19:01 11 Mar 21
Had a great experience and successful result working with Carol at David Sklar & Associates! I was well informed and received great guidance after just the first conversation! She handled everything and helped me build a budget that is realistic and that i can really stick to! I highly recommend Carol and her team at David Sklar. Give them a call!
nicole lowartz
17:02 11 Mar 21
I've used these services twice and they have always been understanding, supportive and informative. They give you hope when you feel like there is none. I've referred multiple people to them and they've all had the same professional experiences. Jackie Stanley was amazing and got the job done. Thank you!
Kirah32
02:07 03 Mar 21
Dealing with any kind of debt can be stressful. Jackie is amazing! Professional, warm and extremely helpful to say the least! She made sure to answer all of our questions, address any concerns and made this whole process as smooth as possible.
Kristine San Gabriel
15:14 02 Mar 21
Working with David Sklar has been an easy and detailed process. I am especially thankful for the personal services provided by Jackie Stanley as she has been very informative and always ready to answer any questions or concerns in a timely manner. I highly suggest working with Jackie if the opportunity presents itself.
Clayton Surujbally
17:09 18 Feb 21
On February 2 l made the somber driveTo David Sklar and associates.I had known this location from having drovePast it many times over the years.I made a appointment using the phone numberOn their door in Pickering, OntLater that day l had a consultation withTrina Powell.Immediately upon meeting with her l wasBecomming more relaxed with the proceedings.Trina, was very down to earth, and very professional.We all have our calling, l can only gather sheHas found hers, and she is very good at herJob, and career.I met with her again two days later but on thisVisit l felt more relaxed, and self assured of myDecisions, having already met with Trina.Thank you! Hat's off to you.I also had a phone zoom call with MarkTo whom as well was very easy, and comfortableTo talk to,Thank you, Mark.The team at David Sklar and associatesShould take great pride, and comfort when theyHelp people, like me and probably so many others.Thank you.
Chris Thompson
17:11 07 Feb 21
I have dealt with this company before many years ago when I did my bankruptcy , and found to be very trustworthy, professional, and right at ease. No judgement, very understanding and very supportive. So of course would come to then again when this time did the debt consolidation. The staff is friendly and goes over all the details with you and answers all your questions so you know exactly what to expect and make an informative decisison. I aslo like how if I had any questions could leave a message or email the company and how promptly they answer me back. Thank you David Sklar & Associates for getting me back on the right track and living a life of debt free again. I have my freedom back thank you for all your help and support. Amen 🙏
Desiree Balkaran
17:09 07 Feb 21
I am so grateful to Rhoda Lewis for an amazing opportunity to start fresh, she is very knowledgeable, professional and very friendly. I felt so comfortable from the moment I walked into her office, I definitely would recommend Rhoda to anyone who is looking for help. I love and appreciate you very much for helping me. After all these years I still kept in touch with you via email just to say thank you. Thank you again so very much and continued blessings.
Elizabeth Thomas
09:18 04 Feb 21