Another deadline for filing Canadian Income Tax returns has come and gone which brings to mind the expression, “two things in life are certain: death and taxes”.
Tax Debt and Bankruptcy
As a result, they have unnecessarily struggled for years, or maybe even avoided filing their income tax returns altogether.
The truth is that income tax debt is generally treated the same as “any other unsecured creditors“.
When a bankruptcy or consumer proposal is filed:
- tax debts such as income tax, GST/HST, source deductions and director’s liabilities, will be discharged upon completion of the process. That means you’re released from paying tax debts you owed prior to filing.
- collection by Canada Revenue Agency such as seizing your bank accounts or wages will stop.
- owing more than $200,000 in personal income tax may delay your discharge in a bankruptcy scenario.
At Yanch Dey & Associates, Licensed Insolvency Trustee, we’ve helped thousands of individuals get a “new tax life”, or clean slate, so they can focus on new tax filings, rather than trying to pay years’ worth of back taxes.
If you want to find out more about your options to deal with tax debt contact us at 905-427-6647.
About the Author
Brenda Owens is a licensed insolvency trustee having graduated from the Durham College Business Administration Accounting Program, with Honours, in 1993.
In October of that year, 1993 Brenda accepted a position with James R. Yanch, and received her Insolvency Trustee License in 2007 and started working as a bankruptcy trustee.
Over the years, Brenda’s ability to listen and thoroughly explain the insolvency and bankruptcy process and Consumer Proposals has helped hundreds of families regain financial control in Oshawa and Durham Region.