Free Consultation

CRA Debts & a Lump-sum Payment

I received a notice stating I owe $3500.00 on a original $1500.00 mattress purchase (unsecured) by a collection agency. I have three years of tax returns stating zero income. I also have $15,000.00 in CRA debt  and I just had back surgery that I had to borrow money to pay for. What are my options? If I am able to pay a lump sum, how much would be reasonable ? Thank you

Posted from: British Columbia

One Response to “CRA Debts & a Lump-sum Payment”

Gareth Slocombe, Trustee | C.I.R.P | C.A said...

Unfortunately, it is normally not possible to compromise CRA debt with a lump sum offer unless it is through a formal consumer proposal. The proposal would include all your creditors, however CRA would have the majority and deciding vote. You would likely need to offer CRA an amount that would net them at least 50%. It must also be clear that a third party (and not you) are the source of the lump sum payment. Another option would be bankruptcy. This would take 9 months to complete if you continue to have no income and you have not been bankrupt previously. If you have no income or realizable assets, then a third option may be simply doing nothing until your situation changes