Sole Proprietorship, Source Arrears and personal bankruptcy
November 15th, 2006 by Questions
2 yrs ago assessed at $100 000.00 source arrears ($10 000.00 penalties incl.). Over approx. 1 year I paid it down to $65000.00. I also owe aboout $10000.00 GST. This was a sole proprietorship in my name. I have not operated this business for one year because it was losing money. The last year I have earned very little money and have avoided any pmts and contact. I also have a bank loan for $7500 (assets worth $5000) and a credit card (same bank) for $6700.00. I have stressed and tried my butt off this last year to come up with a way to pay this off and I can’t do it and have to give up. I need to get a job. I have no assets. How am I likely to be handled by CRA?
2 Responses to “Sole Proprietorship, Source Arrears and personal bankruptcy”
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November 16, 2006 at 10:36 am, Barton Goth, GCO Inc. Bankruptcy Trustees said:
Typically we find that CRA will insist on being paid in full. Failure to negotiate an acceptable arrangement with them will likely result in garnisheeâ€™s, or if you own any real property (i.e. a house) statutory liens (i.e. a charge on any real property you own that can not be removed unless the debt is paid in full, it operates much like a second mortgage but CRA doesnâ€™t have to inform you that it is being done, it is simply registered). The best thing for you to do would be to contact a licensed trustee and look into the filing of either a consumer proposal or a bankruptcy. These really are the only options available when unable to pay CRA debts in full (and donâ€™t delay, especially if you own real property, if you file either the bankruptcy or proposal prior to CRA registering against the property, the debt will cleared, if you donâ€™t beat the registration the amount registered will survive the bankruptcy or proposal).
November 16, 2006 at 10:51 am, tpa said:
Thanks for the response. What I am unsure of is this. CRA has registered against me. But to what have they registered against me. My only assets are a vehicle ($1500), some inventory ($1000), and some tools($2500). Anything else I auctioned off and endorsed the auctioneers cheque over to CRA. If I declare bankruptcy, what survives, the total debt, or the amount of the items I have registered? Basically, do I have to pay CRA $65000 before I can sell my van, or if I sell my van do I just pay CRA the proceeds and the register they have against me is gone? If regardless of bankruptcy I have to pay back $75000 then I may as well inform my wife so she can leave me and live in said van down by the river.