Tax Debts in Bankruptcy

Tax Debts in Bankruptcy

When you are sure just how much you really owe to Canada Revenue Agency (CRA) (formerly Revenue Canada) and have considered less serious solutions, your final possibility is to resolve your income tax debts in bankruptcy.

※ Solution 4: File for Bankruptcy

Bankruptcy can erase many of your debts and give you a fresh financial start. The good news is that you can include income tax debts in bankruptcy. However, bankruptcy is a drastic step and will seriously affect your ability to obtain credit for years afterward.

There are some special rules that deal with tax debts in bankruptcy. We recommend that you contact a Licensed Insolvency Trustee and ask him/her to review your situation and confirm that your tax liability will be discharged if you go bankrupt.