Can CRA stop or cancel a personal consumer proposal?
October 9th, 2014 by Questions
Can CRA stop or cancel a personal consumer proposal, because a new audit after the proposal was accepted by CRA ( weeks later they called a new audit)-because the person was a director of corporation which is closed already, after closure the corporation reassessed by CRA -and according to them the company owes money to them-so the director is responsible for the payment.
Makes no sense because this is the main motive to go and get a proposal!
Again can they stop or cancel ?
Posted from: Ontario
One Response to “Can CRA stop or cancel a personal consumer proposal?”
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October 09, 2014 at 8:30 am, Doug Stuive, CA | Trustee | CIRP said:
The Canada Revenue Agency has the same rights as any other unsecured creditor in a consumer proposal. They have the right to vote “yes” or “no” as to whether they accept the terms offered. If the majority of creditors in dollar value vote to accept your proposal then the rest of the creditors will be subject to the terms of your consumer proposal. So in general the Canada Revenue Agency has no special ability to cancel or stop a consumer proposal after it has been accepted.
The Canada Revenue Agency does have the right to later take steps to revalue their claim in the consumer proposal. They are within their rights to complete an audit in order to verify the amount of the debt that is owed to them, even when the corporation has been closed. As a result of this audit if it is determined that the amount of the debt is much higher a meeting of creditors is often called to discuss whether the creditors would accept a lower percentage than what was originally promised. For example if you agreed to pay 30 cents on the dollar and now the debt is much higher than anticipated, you may need to increase your payments to ensure the creditors receive 30 cents on the dollar of their claim. If you can’t afford to do that, the consumer proposal may be amended and the creditors asked to accept a lower percentage as a settlement. At the meeting of creditors the creditors can again vote on whether to accept your consumer proposal as the total amount they are going to receive has changed. At that time, the Canada Revenue Agency, and any of your other creditors can vote not to accept your proposal in light of the lower anticipated dividend.
While it seems that is what happened with your file it is not possible to know that for sure without more information. I would advise you to contact the administrator of your consumer proposal to discuss the situation and the options you now have available. If a bankruptcy is considered you are not required to file that bankruptcy with the same office that you filed your consumer proposal.