Bankruptcy Alberta Archive

Question and Answer Category - Other

Posted on March 26th 2010

Question

I went bankrupt in August, 2008, and received my September GST cheque. My Bankruptcy Trustee has contacted me and has indicated that I must reimburse my bankruptcy estate for funds he says I have received inappropriately. The cheque was payable to me, not my Bankruptcy Trustee. Do I have to pay it back?

Answer

Generally speaking, GST credits and related refunds that are payable to a bankrupt vest with or become property of your bankruptcy estate, and your Bankruptcy Trustee must collect the GST for the benefit of your creditors. There is a limit, however, and that limit is set out in Rule 59 of the Bankruptcy and Insolvency Act. There are slight variations between provinces and estates, but the threshold in the case of a first time bankrupt in Alberta approximates $1,750. If total receipts in your bankruptcy estate exceed the limit, you will be entitled to a refund of any extra GST when your bankruptcy estate is closed. Once the limit has been exceeded, some Bankruptcy Trustees will write Revenue Canada and tell them to send all future GST cheques to their bankrupt, rather than making them wait for a refund. Our Alberta Bankruptcy Trustees do exactly that, and as a result, our clients receive the GST refunds they become entitled to sooner than estate closure.

Posted on March 26th 2010

Question

I filed bankruptcy a couple of months ago. I am still receiving bills and credit card statements, and today I received a call from a collector who said he has no notice of my bankruptcy. What should I do?

Answer

Unfortunately, this is a common occurrence. The problem rests with the creditor(s). Creditors have set up bankruptcy departments in their companies or are relying on bankruptcy agents to complete and file bankruptcy proofs of claim forms for them. The bankruptcy departments in these companies, or Agents who are filling in the bankruptcy claim forms are not letting their collectors or accounts receivable departments know who has gone bankrupt. It can take some time for creditors to make this happen, and that is normal.
Some of our clients have reported that they continue to receive statements for more than six months after they filed their bankruptcy and although annoying, they eventually stopped.
If a collector calls you, don’t be afraid to advise him/her that you have gone bankrupt or filed for bankruptcy, and that they should not call you again. They should be directing their questions to your Bankruptcy Trustee. You can give them your Bankruptcy Trustee’s phone number and request that they call your Trustee themselves, to verify your bankruptcy assignment.