Question: As the title says, I filed bankruptcy 7 years ago, due to circumstances the final fee was never paid to the trustee and I am still undischarged. I recently spoke with the trustee and the discharge can go ahead.
However I have accumulated a $20000 debt with revenue canada, and they are garnishing 40% of my income. What can I do about this, if anything?
Answer: The short answer is there is very little you can do. You are an undischarged bankrupt, so you can’t file bankruptcy to eliminate your tax debt until you are discharged from your first bankruptcy.
The most logical approach would be to work with your trustee to get your first bankruptcy finished. At the same time, you could talk to Revenue Canada to see if they would agree to lowering the amount they are garnisheeing, although there is no guarantee they will make any changes.
Once you are discharged from your first bankruptcy you can talk to an Ontario bankruptcy trustee about a second bankruptcy or a proposal. (A second bankruptcy lasts longer and is more costly than a first bankruptcy, so consider all options before filing bankruptcy for a second time).