Tax refunds

The tax refund received in the financial year before you enter bankruptcy is regarded as an asset which your Trustee can claim. Tax refunds received during bankruptcy are added to your annual income. If your income is above the set amount you may need to pay compulsory income payments.

Tax returns

You are responsible for continuing to lodge your tax returns during bankruptcy. If you have outstanding tax returns, lodge them as soon as possible as they will be covered in your bankruptcy.

Tax debt
If you owe a debt to the Tax Office your tax refund will be withheld and used to pay the debt, even though it is listed in your bankruptcy. At the end of your bankruptcy, the remaining tax debt from the period before you became bankrupt will be wiped out. If you don’t have any new tax debts, you will be allowed to keep any future tax refunds after your bankruptcy ends