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back taxes and bankruptcy

My partner has been hit with a tax bill in the tens of thousands of dollars. It is due to a failure to pay Ontario taxes on a business he and his ex-wife ran in the mid-nineties.

The company they ran together hasn’t been generating income for several years and they were in the process of disolving it. IS it possible that the company can simply claim bankruptcy in order to aviod payment?

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One Response to “back taxes and bankruptcy”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

There are certain types of debt that survive the corporate ownership structure and directors can be personally liable for. These include GST, payroll remittances, provincial sales tax and any debts you have personally guaranteed. If you have either of these types of debts outstanding with CCRA then there is very little value to filing a corporate bankruptcy. However, if you don’t have any of these types of debts than you may not need to do anything as the creditors may not have the legal authority to pursue you in your personal capacity.

I recommend consulting with a trustee in your local area as soon as possible as CCRA has the unique ability to erode some of the personal exemptions that may be available in your area.

If you simply click on the Find An Expert link on the right hand side of the page to contact a local trustee, he will be able to review your situation, and help you to determine the best course of action to follow.