Bankruptcy/Income tax - Murray Morisson - Bankruptcy lawyer

We claimed bankruptcy in Aug/06 and were discharged in May/07,after 9 months meeting all of our obligations with nothing further owing to our trustee. We did sign to have the trustee prepare and keep 2006 tax refunds.   Am I correct in thinking that we are entitled to our post bankruptcy(2007) tax refunds? Also I checked my E-pass account at CRA and found out that the trustee is authorized until Aug/2009.   We thought we had authorized them to represent us in the 2006 bankruptcy year,(as they requested). Were we misled and if so is that legal?   Can we have them removed as our authorized representative now that we have an absolute discharge?   Thankyou

david ingram replies:

In general you are usually entitled to keep your refund from Aug to Dec 31 2006 but if the trusteee did not have enough in the bankruptcy estate to pay their own fees, it is not unusual for them to keep another refund as well,

If you are sure that your agreement for the Trustee to keep the CRA refund was only until the end of 2006, then you should file form T1013

Check the box   2 - A 'CANCEL ALL CONSENTS'

Mail it to:

Tax Centre
9755 King George Highway
Surrey, BC, Canada

Or your local CRA office.

If you cannot find a local address, send it to Surrey and they will look after it for you.

That will remove the trustee as your representative.

The original form you signed automatically gave them a three year time period, and it was not necessarily unreasonable at the time.  Lots of times, a bankruptcy discharge takes two or three years.  My own, for instance went from Aug 13, 2002 until about July 5 2004, almost two years.  When I was in court getting the discharge ruling, another poor fellow was there asking for a discharge after six years.

However, although traumatic to start with, the bankruptcy was one of the two or three best things that ever happened to me and I will bet that your life has improved since yours.

I cannot encourage enough people to 'pull the plug' and get on with their life.

However, I do have a caveat.   When you go to see a Trustee, no matter how much you like them and no matter how many recomendations you received and no matter how nice their office is, as soon as you sign those papers, that trustee is working for the creditors.

As they say on television, anything you say to the trustee can and WILL BE used against you later if it was the wrong thing to say under the circumstances.  If you have a question and ask the trustee, it might be the wost thing you could have asked.

Every person in bankruptcy needs an ADVOCATE and that person is NOT your trustee. 

I recommend Murray Morrison in Surrey as an advocate in the Lower Mainland of BC. - his phone number is (604) 930-9013.

The following is the article I wrote about my own bankruptcy for the Western Investor.  And that is another point.  If you go bankrupt, do NOT try and keep it a secret.  If you do and it leaks out, it is a tremendous embarrassmnet.  Tell your experience to family and friends - it might help them out.    .