Tax debt to Canada Revenue Agency (CRA) can be very difficult to pay back. With penalties and interest, your income tax or GST/HST debt can grow pretty quickly. Fortunately, a consumer proposal can help reduce your total debt and stop the interest to give you an opportunity to pay back what you owe.
A consumer proposal, depending on your assets, how much you owe and your income, can reduce your debt to approximately 25% of what you owe. To find out how much a proposal will cost you, a Licensed Insolvency Trustee conducts a free review of your income, expenses, total debts owed and assets.
You can include income tax debt owed, Harmonized Sales Tax (HST), and if you’ve closed down (or are in the process of closing) a business there may also be some additional tax related debt(s) that you may be able to negotiate and get some relief from.
To prepare yourself for a meeting with a Trustee, you will need to gather a little bit of information first. You may also be asked to get an estimate or prepare any outstanding tax returns before a complete review can be performed.
If you expect that you’ve already started to build up a tax debt for the current year, you may also be asked to provide an estimate (year to date) of that debt as well. Here is a list of what you will need:
The short answer is yes. Every proposal is reviewed case by case. If you are experiencing a disruption in income or have recently lost your job due to the Covid-19 pandemic, we can still review your circumstances to see if it is possible to negotiate with Canada Revenue Agency.
CRA has recently announced that they are willing to be flexible with tax debtors at this time. We can help you understand how this may be beneficial to you in dealing with your tax debt.
With the extended tax deadline fast approaching, we would be happy to review your circumstances by telephone at this time, free of charge. Please contact our team by completing our request form or calling 1-800-372-7337 to set up a time to chat. Let us help you become tax debt free with a Consumer Proposal today.