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If I File For Bankruptcy, Will I Lose My GST And Child Tax Benefits?
2012-08-24
Author: Bradley Milne
Hello,
Bankruptcy does not affect your ability to receive child tax benefits. If you are eligible for this benefit, you would continue to receive it during the bankruptcy and the Trustee would have no interest in these funds.
GST credits are treated differently. Upon filing for bankruptcy, a notice of the proceeding is sent to Canada Revenue Agency who in turn starts sending your GST credits directly to the Trustee. These funds are held in trust and, in some cases, a certain amount of your GST may be returned to you at the end of the bankruptcy. The extent to which some GST may be returned to you is based on whether or not a dividend is payable to your creditors without taking the GST funds into account. In summary, understand that your GST will be directed to the Trustee during the bankruptcy, however, you may get some of it back at the end of the process.
Bradley Milne
CIRP, LIT
Senior Vice President
Servicing: Brandon, Killarney, Portage la Prairie, Neepawa, Virden, Souris, Deloraine
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