Does bankruptcy clear you from tax debt?

A friend who has serious credit card problems. She is self employed but has been living `beyond her means` for some time thanks to credit cards. Now I discover, the taxman is after her, and for good reason. Does bankruptcy erase back taxes too?

Posted from: Quebec

One Response to “Does bankruptcy clear you from tax debt?”

Barton Goth – Goth & Company Inc. -Trustee in Bankruptcy said...

Yes, taxes are covered by a bankruptcy. Although the process may change a little depending on how large the tax debt in question is. If the tax debt makes up a substantial majority of the debt then it is very common for Canada Revenue Agency to oppose the bankruptcy discharge . For a better idea if this is a risk or not I would suggest your friend contact a local trustee.