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How Are Tax Refunds Affected In A Bankruptcy?

 15 Jul 2019
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One asset that is affected by a personal bankruptcy is income tax refunds.  The law requires that Canada Revenue Agency (CRA) send the trustee income tax refunds for specific years so that the refund can be included in the proceeds available to the creditors. Let’s consider three different periods of time:…

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Surplus Income, Bankruptcy in Canada, Only One Person Bankrupt

 26 Mar 2024

Note: the question in this article contains old surplus income limits. Click here to review the updated limits. Question: If I file bankruptcy in Canada, does the surplus income test apply at the household income level or the individual level when only one party is going bankrupt? If the bankrupt…

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Surplus income when bankrupt in Canada and paying spousal and child support

 26 Mar 2024
man counting coins

Click here to review the most recent surplus income limits. Question: My income is $3200 take home per month, I am separated from my wife but I pay her $500 per month spousal support and $815 per month in child support, how would the surplus income work for this situation?…

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Surplus Income Limits for 2024

 26 Mar 2024

If you file for bankruptcy in Canada, you are allowed to keep a portion of your income each month.  If you earn over this limit, you are required to contribute half of that surplus income into your bankruptcy estate, and it is distributed to your creditors. Each year the Office…

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Surplus Income and Bankruptcy in Canada: Is a Consumer Proposal The Better Option?

 26 Mar 2024
surplus-income-bankruptcy-or-consumer-proposal

One of the most important concepts to understand before you file bankruptcy in Canada is surplus income. Here’s the concept: The more you earn, the more you are required to pay while you are bankrupt. The concept makes sense. If you are a doctor earning $200,000 per year and you…

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Will An Automatic Stay Of Proceedings Stop Canada Revenue Agency?

 12 Sep 2018
stay of proceedings bankruptcy cra

Filing a consumer proposal or bankruptcy creates an automatic “stay of proceedings” under federal law. That means that your creditors, the people you owe money to, cannot start or continue legal action to collect the debt.  No other consumer debt relief option can make that claim. A common question that…

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Should I File Bankruptcy for Tax Debts?

 03 Aug 2018

One common misconception about bankruptcy is that tax debts, whether owed to Canada Revenue Agency (CRA) or provincially, do not go away after a bankruptcy. But this could not be further from the truth! Only a few types of debts survive a bankruptcy. All tax debts, whether for personal income…

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What Happens To Debt In A Consumer Proposal?

 09 Feb 2018

A common question that trustees receive is, “what happens to debts after filing a bankruptcy or consumer proposal?” The legal status of the debt is very simple in a bankruptcy, however, slightly more complicated during a consumer proposal because of its length. When filing a consumer proposal, you are effectively making an…

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How Does Bankruptcy Work – Before, During and After?

 03 Jan 2018
how does bankruptcy work | bankruptcy canada

Before Bankruptcy The first step to declaring bankruptcy in Canada is to determine if bankruptcy is the correct debt management solution. Book a debt assessment with a bankruptcy trustee. This is a chance to review your assets, debts and personal budget to understand what a bankruptcy will cost and compare bankruptcy to…

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Personal Bankruptcy Shouldn’t Be About Your Credit Score

 05 Dec 2017

The title of this article says it all.  If you are in enough financial trouble that you are actively researching personal bankruptcy, your credit score may be the least important factor for you to consider.  Allow me to explain. It is quite common for people that come to see us…

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