help with tax

3 Tax Debt Relief Options: Dealing with the Canada Revenue Agency

Do you owe taxes that you are unable to pay?

Debt happens to everyone but owing money to the CRA can cause significant stress. What makes it worse, is the power that CRA force on you to collect on these debts, including wage garnishments, frozen bank accounts and even registering a lien on the debtor’s personal property.

What are your options?

A Licensed Insolvency Trustee can help you with all unsecured debt including tax debt.

1. Voluntary Repayment Plan

Depending on the amount owing, you may be able to make a voluntary repayment plan with CRA to repay your debts over a longer period of time, but you must be able to pay the full amount of taxes owed, which includes penalties and interest. This often requires the help of a tax accountant and can be a tedious process since you will have to provide proof of your inability to pay. If you are simply in ‘over your head’ with tax debt, then another debt relief option may be best, and this is where Allan Marshall & Associates can help.

2. Filing a Consumer Proposal

A consumer proposal is a relief option under the Bankruptcy and Insolvency Act (BIA) and is the only tax relief option that the CRA will accept to compromise the amount required to be repaid. This must be done with the help of a Federally Licensed Insolvency Trustee. Filing a Consumer Proposal is a good choice since it includes other debt, for example, if you also owe on credit cards, an offer is made to all of your unsecured creditors, including CRA, to repay an amount less than what you owe. Please note – the CRA will require all outstanding tax returns to be filed prior to the vote on the proposal before CRA will consider voting in favor of a proposal. You can talk to your LIT to get help in understanding what needs to be filed, by when.

3. Filing Personal Bankruptcy

If your Tax debt combined with other debt has become too much, and an offer to settle the debts does not seem possible under a proposal, then filing bankruptcy may be a best option. Filing Bankruptcy can help eliminate tax and government debt, along with other unsecured debt.

We Can Help with Government and Tax Debt

If you owe Government debt, such as Tax Debt, HST, CERB, etc, we can provide you with options to deal with monies owed to Canada Revenue Agency. Our LIT’s negotiate with the CRA and creditors every day to help eliminate debt load and make payments more manageable. Tax debt is governed by federal tax laws, however the BIA (Bankruptcy and Insolvency Act) states that CRA debt is treated like any other creditor in a consumer proposal or personal bankruptcy. Only a formal tax relief solution can stop CRA actions and eliminate back taxes.

Anyone can fall victim to Tax debt; Problems can occur from reassessments, Self-employed individuals not claiming properly, personal income tax, or even pensioners with a fixed income who did not have enough taxes taken off.

If you would like help with your tax and government debt, contact us at Allan Marshall & Associates. We have the professional experience to work with you to come up with a solution that you can afford. Contact us for a free consultation.

About Author

Allan Marshall & Associates Inc.

Allan Marshall & Associates Inc. is a Licensed Insolvency Trustee firm with locations throughout the Maritime provinces. We are licensed by the Federal Government of Canada to administer bankruptcies, Consumer Proposals, receiverships and other insolvency services. We have the knowledge and experience to assess your situation and offer the best advice for your particular need, whether you are a first time bankrupt or simply struggling to make ends meet.