Which tax returns do you have to file when you file for bankruptcy?
When you declare bankruptcy, you must file several returns so the CRA (Canada Revenue Agency) can work out what you owe and ensure you are discharged promptly. Your Licensed Insolvency Trustee, the person appointed to administer your bankruptcy, takes care of most of these tasks.
If a return for an earlier year was never filed, your trustee files it. Any refund goes to the trustee as property of the estate, and any tax owing is included in your bankruptcy.
Your trustee files a pre-bankruptcy tax return that covers the period from January 1 until the day before your bankruptcy filing. If assets are sold or a business is shut down to pay your creditors, the trustee will also file an in-bankruptcy tax return. This return reports the income generated from those assets.
A post-bankruptcy return covers the date of bankruptcy to December 31. You are responsible for that one, but your trustee can file it for you.
Source: Canada Revenue Agency – Doing your taxes when filing for bankruptcy
| Return | Period it covers | Who files it | Who gets the refund |
|---|---|---|---|
| Unfiled returns | Calendar years before the year of bankruptcy | Trustee | Trustee |
| Pre-bankruptcy return | January 1 to the day before bankruptcy | Trustee | Trustee |
| In-bankruptcy return | Income from assets sold or a business wound up | Trustee | Trustee |
| Post-bankruptcy return | Date of bankruptcy to December 31 | You, or your trustee | Trustee |
| Future returns | Calendar years after the year of bankruptcy | You | You |
How to label each return
When you file a return relating to your bankruptcy, state clearly whether it is a pre-bankruptcy, in-bankruptcy, or post-bankruptcy return in the Identification section on the first page. The CRA applies different rules to each period and uses that label to tell them apart. If you label it incorrectly, the CRA may process the return as an ordinary return covering the full year.
The filing deadlines remain unchanged. Most cases have a deadline of April 30, or June 15 if you or your spouse had self-employment income. In both situations, you must pay any balance owed by April 30.
Source: Canada Revenue Agency – Doing your taxes when filing for bankruptcy
How are tax refunds affected during bankruptcy?
If you are due a tax refund from a previous year or the year of your bankruptcy, it becomes part of your bankruptcy estate. This includes refunds from years prior to bankruptcy and from your pre-bankruptcy return. CRA sends this money to your trustee for distribution among your creditors.
The post-bankruptcy refund goes to the trustee too, for any bankruptcy filed on or after July 7, 2008. This applies to every bankruptcy filed today.
Source: Canada Revenue Agency – Doing your taxes when filing for bankruptcy
Under Section 67(1)(c) of the Bankruptcy and Insolvency Act, creditors are entitled to your property on the bankruptcy date and anything you acquire before discharge. A pending tax refund is considered money owed to you and is classified as property.
Source: Justice Laws Website – Bankruptcy and Insolvency Act, section 67
Refunds for years after your bankruptcy go to you unless your trustee has a court order. File those returns by the usual deadline. If you’re still in bankruptcy when the CRA assesses the return, it can apply the refund to any post-bankruptcy taxes you owe before releasing the rest to you.
What happens to tax you owe
Taxes owed on your earlier returns and on the pre-bankruptcy return are included in your bankruptcy. Under section 121(1) of the Bankruptcy and Insolvency Act, debts you owed on the day you went bankrupt are provable claims, and your discharge clears them. Read our guide on bankruptcy and tax debt.
Source: Justice Laws Website – Bankruptcy and Insolvency Act, section 121
Tax on the post-bankruptcy return is different. That liability arises after your bankruptcy date, so it is a new debt, and you pay it yourself. For the wider picture on money owed to the CRA, see CRA tax debt relief.
Does bankruptcy affect my CCB payments?
Canada Child Benefit (CCB) payments are unaffected by bankruptcy. Subsection 122.61(4) of the Income Tax Act says CCB cannot be assigned, charged, attached or given as security, and it is not considered income in bankruptcy.
Source: Justice Laws Website – Income Tax Act, subsection 122.61(4)
For the benefit year from July 2026 to June 2027, you can receive a maximum of $8,157 per year for each child under 6 and $6,883 for each child aged 6 to 17, both of which are protected from your trustee. But if you file your bankruptcy returns late, payments will be paused until the CRA recalculates your entitlement.
Source: Canada Revenue Agency – Canada child benefit, how much you can get
What about the GST/HST credit?
The GST/HST credit lacks the protections of the Canada Child Benefit (CCB). According to Rule 59 of the Bankruptcy and Insolvency General Rules, the credit is only excluded from your estate if it would not affect creditors’ dividends. In a typical bankruptcy with no dividends, the full payment goes to your trustee.
The credit is paid quarterly, so you may receive multiple payments during bankruptcy. Check with your trustee before including it in your budget.
Source: Justice Laws Website – Bankruptcy and Insolvency General Rules, rule 59
Can a consumer proposal protect your tax refunds?
Yes, a consumer proposal protects your tax refunds. There is no estate and nothing vests in a trustee, so the CRA keeps sending your refunds straight to you while you make your monthly payments.
In the year ending June 30, 2026, consumer proposals made up 78.3% of the 145,762 consumer insolvencies filed.
If keeping your tax refund matters to you, consider a consumer proposal before you file for bankruptcy.
Frequently asked questions
Do I get my tax refund if I file for bankruptcy?
No, you will not receive your tax refund if you file for bankruptcy. Refunds for the year you file and for all previous years will go to your trustee and be distributed to your creditors.
Who files my taxes during bankruptcy?
Your trustee will file any previously unfiled returns, including the pre-bankruptcy return and the in-bankruptcy return if needed. However, the post-bankruptcy return is your responsibility, although most trustees will file it for you. You are also responsible for filing later-year returns.
Do I keep my Canada Child Benefit during bankruptcy?
You keep your Canada Child Benefit. Subsection 122.61(4) of the Income Tax Act exempts CCB payments from bankruptcy, allowing them to continue unchanged and protected from any claims.
What happens to a refund the year after bankruptcy?
You keep the refund unless a court order says otherwise. If you are still bankrupt when you file your taxes, the CRA can use your refund to pay any tax debt incurred after your bankruptcy, meaning you might not receive any of it.
Is post-bankruptcy tax owing included in my bankruptcy?
No. Post-bankruptcy taxes owed are not included in your bankruptcy. Taxes incurred from the date of your bankruptcy until December 31 are considered post-bankruptcy, so you are responsible for paying them in full.
Does bankruptcy affect my GST/HST credit?
Usually, yes. In a consumer bankruptcy with no dividend available to creditors, your GST/HST credit goes into your bankruptcy estate rather than to you.
What happens if I have not filed taxes in years?
Your trustee will file the missing tax returns. Any taxes owed for those years are included in your bankruptcy and will be cleared by your discharge. Any refunds will go to the estate.
Do I have to tell the CRA I filed for bankruptcy?
Your trustee notifies the CRA when filing and lists them as a creditor for any tax debt. So always keep your address updated with them.
Talk to a Licensed Insolvency Trustee
The initial consultation is free, and there is no obligation to file anything. Just provide your most recent notice of assessment and an estimate of your outstanding balance. This will help your Licensed Insolvency Trustee advise on any returns and refunds.
