Government taxes and starting a business

November 27th, 2009 by Questions

I currently have letters from government stating that I owe them more than $10,000. The amounts are not accurate as I did not file taxes for 3 years. Once I file my taxes , this amount is likely to be adjusted. How can I include it in my bankruptcy? Should I wait or can the amount owed change during the 9 months to discharged period. Also, can I do entrepreneurial activities or start my non-profit during this time, or do I have to wait. As an artist, I have the option of having additional income outside of my regular job. I assume that means I will be subject to he surplus aspect of Bankruptcy.

Posted from: Nova Scotia


One Response to “Government taxes and starting a business”

, A licensed trustee said:

In regards to your taxes, you may file the 3 outstanding returns before you file or during your bankruptcy, which ever makes you more comfortable (there’s no right or wrong answer to this part of your posting – people do it both ways).

In regards to starting a business, you certainly may, BUT you may not be an officer or director of a corporation while you remain an undischarged bankrupt. That means if you try and create a corporation or a not-for-profit you will need someone else to serve as the director(s) until your bankruptcy is done.

And finally, if you earn extra income that places you over the Surplus Income Standard then yes, you will be subject to the surplus income payments (50% of all amounts over the standard) and your bankrutpcy may be extended from 9 to 21 months.

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