As we say goodbye to another tax season, there are many of us that have a sense of dread. Whether it is due to a failed business, improper management of self-employed earnings, or several years of not keeping up with filing your returns, the amount owed to the Canada Revenue Agency (“CRA”) can seem insurmountable.
Many individuals think that there is no way to reduce or eliminate the burden of their tax debt. While struggling to make those payments, regular consumer debt increases as they rely on credit for normal household expenses. If your credit situation has gone too far to qualify for a loan to pay out the CRA, or the amount owing to the CRA is too high to obtain a bank loan, there is another alternative.
Debt owing to the government can be included in both a bankruptcy and consumer proposal. This would include debt owing for GST returns, personal income tax debt, amounts owing for payroll or other source deductions, and even amounts owing to the Canada Mortgage and Housing Corporation for the shortfall on the sale of a property. Even if you have been reassessed with an amount owing due to deductions that have not been accepted, including those for charitable donations, this amount can be part of a bankruptcy or consumer proposal filing.
If you have the ability to make payments, but can’t afford the entire amount owing to the CRA, filing a consumer proposal may be your best option. This allows you to make an interest-free settlement with the CRA to pay all or a portion of your debt. The payments are set according to your household budget and are made for no more than five years. After you complete your payments, the balance of the debt is released.
Let next year’s tax season come with a sense of relief. Call today to schedule a free confidential consultation with a licensed Trustee in your area.