Can a consumer proposal also deal with tax debt?
Question about consumer proposal
posted by Questions @
1 Expert Comment:
At May 7, 2009 |
6:10 am
, Barton Goth, Trustee in Bankruptcy Said...
Technically yes, the filing of a consumer proposalcan deal with money owing to Canada Revenue Agency(CRA). But practically it depends on what percentage of your debt you owe to CRA and whether or not they will cooperate with the filing of a consumer proposal. Most recently if CRA is the major creditor, if you have a history of non-compliance (i.e. not filing returns, not making any effort to pay your taxes etc.) then it is very difficult to get CRA on Board. But if these factors don’t exist and you have made regular efforts, they just haven’t been enough, then the CRA representatives will be more willing to consider this route.
Either way, whether you are talking about the filing of a consumer proposal or we are talking about the filing of a bankruptcy because they won’t consider things in your situation, it is important to start the process instead of delaying further. CRA has very powerful collection abilities (i.e. seizing self employed persons receivables directly from customers) and even has a few methods of having their rights of collection survive even if a bankruptcy is filed (i.e. statutory lien on real property). So you are always better to stop the problem before CRA starts to utilize some of these collection powers and really begins to make life difficult.
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