Is bankruptcy the only option?

March 6th, 2009 by Questions

My brother is in serious arrears with the CRA. He has not filed his taxes in close to 9 years, due to serious drug and alcohol addictions. He is now clean and sober and wishes to get back on the straight and narrow. CRA will be the only debt he has, but we estimate once his taxes are filed and penalties and interest are assessed, he will owe them upwards of $110,000+. He has no assests, and literally owns nothing but his few personal possesions. No vehicle, no home, no savings, nothing. He has recently reconcilled with his girlfriend after being seperated for some time, so he is supporting her and their 5 children as well. Their only income comes from his job, which earns him arrox. $60,000/yr before taxes. Is there any possible way that he can repay this debt to CRA, or is bankruptcy his only option? A loan is not an option because he has very poor credit. Also, once his taxes are caught up he will already be paying about $1000 a month to keep up with his current year`s taxes. Could you please dvise as to any possible options he may have? Thanks!

Posted from: Alberta

Questions

One Response to “Is bankruptcy the only option?”


, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

When you have this much owing to the government for taxes you really only have three options.

The first option is to negotiate re-payment terms with the government directly. Now these terms will be to pay the debt, interest and penalties in full. Canada Revenue Agency will not accepted anything less than everything in full.

The second option is to make an appeal to Canada Revenue Agencies under their Fairness provisions. The problem is very few times is this Fairness process ever successful and typically only appears to be successful if you can refute that the money is actually owed.

The final option, and likely the one that your brother will be forced to look at is a bankruptcy. Normally a bankruptcy is the only thing that people in his situation are able to do. So the best thing for him would be to contact a local trustee directly.

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