Trustee taking tax credits for 3 years?!

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Trustee taking tax credits for 3 years?!
« on: March 27, 2014, 12:36:59 AM »
I received my personal discharge May 2011.  I was told by my trustee that their discharge would be another 6 months.  It seems like my file was "lost" or something because when I called six months later I was told my file was closed and that couldn't happen unless the trustee discharged itself from my file.

However, I still wasn't getting any GST, BC Climate Action Tax Credit or HST credits since 2010, when I first filed for bankruptcy.  I had to call Canada Revenue Agency and found out the trustee had not, in fact, discharged.  When I called the trustee again to find out why, the trustee immediately stopped taking my tax credits but now claimed my file was still open because a creditor hadn't filed a Proof of Claim.  She told me I may stay in bankruptcy forever if the creditor didn't send one in, which made no sense at all, and told me I should never have gotten my personal discharge!

My main question is this:  How long is the trustee entitled to take my tax credits for?  My bankruptcy was 9 months and I was extremely low income until recently.  The trustee has given me back my GST credits but is keeping the other $4,000 that was collected over the past 3 years.  This doesn't seem right when I had already paid off most of my trustees $1800 fees prior to discharge.  My trustee is stonewalling me now, and refusing to answer my question.

My second question is this:  Can I really stay in bankrutpcy forever and does it really matter to my credit if the trustee never discharges from my file?



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Re: Trustee taking tax credits for 3 years?!
« Reply #1 on: March 27, 2014, 08:14:47 PM »
A trustee isn't required by the Bankruptcy Act to close your file by a specific time; the administration of your file needs to be complete. There aren't a lot of other concrete requirements.

For your tax returns, the trustee is permitted to keep (in your situation) your pre-bankruptcy and post-bankruptcy tax refunds, your in-bankruptcy refund (I think) [and any other refund that you assigned to her at signup. So, it's possible that she is entitled to keep the returns, but this is very unlikely.

With with respect to staying in bankruptcy forever, this isn't exactly true. If you received your discharge, you aren't "in bankruptcy" any more, but your file is still open.  In terms of your credit, these get purged from your credit file after six years from the date of YOUR discharge. This is true for Equifax at least; not sure about TransUnion.

The whole thing about the proof of claim is total crap, so far as I know. It's possible to have a bankruptcy with no creditors that prove their claim. The trustee gets to take certain fees and then everything goes back to you. It's rare, but it happens.

I would make the following suggestions:

Get a free credit report from Equifax or TransUnion to make sure everything is correct.
If you can't get things sorted with your trustee, make a complaint to the Office of the Superintendent of Bankruptcy. Their number is 866x376x9902. It won't let me type in phone numbers regularly - ignore the X's.


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