Question: I filed a consumer proposal earlier this year. I just did my tax return and discovered I am supposed to get a nice income tax refund. Will this be taken from me because of this consumer proposal?
Keep Your Assets In A Consumer Proposal
No, you will not lose your tax refund. One of the main advantages of a consumer proposal is that you get to keep assets like tax refunds (unless you owed money to Canada Revenue Agency). That’s why for many people a consumer proposal is a great bankruptcy alternative.
- any tax refunds owing to you for years before the proposal will be yours to keep unless you have other tax debts owing to CRA (they will offset the pre-proposal refund against your debt).
- any remaining tax debt owing in the tax years prior to the proposal year will be included in you proposal so you will not need to pay any balance.
- for the year you file your proposal and future years you will be responsible for any future income taxes owing and entitled to receive any income tax refunds.
To find out more about how a consumer proposal works, contact a trustee in bankruptcy for a no cost, no obligation consultation to discuss a resolution of your debt issues.