There are two tax returns required with personal bankruptcy.
The trustee is required to file your income tax return for the tax year in which you file personal bankruptcy. The tax return relating to the year in which you file personal bankruptcy is not standard. In fact it is not one tax return, instead it is two tax returns – pre and post.
The pre income tax return relates to the period from January 1 to the date of bankruptcy. Any debt owing on your pre income tax return is a debt which was incurred prior to filing personal bankruptcy and therefore it is included.
The post income tax return relates to the period from the date of bankruptcy to December 31. Any debt owing on your post-bankruptcy income tax return is a debt which was incurred after the date of bankruptcy and therefore is not included.
You are required to pay any debt owing on your post-bankruptcy income tax return. If there is a refund on either your pre and/or post income tax returns, these refunds will be paid to your trustee.
