If you owe the Canada Revenue Agency (“CRA”) for unpaid income taxes, you are not alone. Many Canadians owe the federal government for unpaid income taxes and, for some, it is their largest debt. There are many reasons an individual may owe the CRA for unpaid income taxes. Some of the most common reasons are:
The CRA has significant collection powers to recover income tax debt, including asset seizures, bank account seizures, investment seizures and wage garnishments. The CRA can also file a lien against your residence.
It is important to understand that debts owed to the CRA are no different than any other unsecured debts and may be included in a consumer proposal or personal bankruptcy debt restructuring plan. Often, we hear the comment from clients that “debts owed to the CRA must be repaid” or “you can never get rid of government debt”, which are common misconceptions.
To obtain protection from the CRA and avoid collection action for the recovery of a tax debt, contact a Faber Trustee to review your options and discuss a consumer proposal or personal bankruptcy debt restructuring plan that is appropriate for you.