February 28th, 2011 by Questions
I own a Incorporated business in Alberta. I owe Revenue Canada over $25, 000 in GST, CPP, and personal income tax. If I filed for bankruptcy, would all of these be eliminated?
Posted from: Alberta
One Response to “Mr. H”
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February 28, 2011 at 9:53 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
The first thing we must do is clarify who is filing the bankruptcy, you or the incorporated company.
If the incorporated company files What is bankruptcy? the GST owing would simply survive onto you as director. So there isn’t a great deal of benefit from a corporate bankruptcy with GST.
If you file bankruptcy personally then the question becomes do you continue to operate the incorporated entity. If yes, then the company continues to be responsible for the GST and CPP but you are personally cleared from the personal tax. However, if you close the incorporated entity before the filing of a bankruptcy, then you are cleared from all of the debt you identified.
This can be a bit complicated, so I would recommend you contact a local trustee and they will explain this director liability issue in more detail and help you determine what are the best steps to take to make sure you are fully protected when you file.