Tax debt can be a challenging issue to deal with, but with the right information and strategies, you can take control of your finances and get back on track.

It’s essential to understand that tax debt is a common issue in Canada, and many Canadians struggle with it. The Canada Revenue Agency (CRA) is responsible for collecting taxes and can take enforcement action against those who fail to pay their taxes on time.

If you owe taxes to the CRA, it’s essential to take action to resolve the debt before it escalates. Ignoring the problem or hoping it will go away will only make matters worse.

There are several options available to you if you have tax debt in Canada. These include:

1. Payment arrangement: You can contact the CRA and arrange to make monthly payments to pay off the tax debt. This option is best if you can afford to pay the full amount owing but need more time to do so.

2. Consumer Proposal: A consumer proposal is a legally binding agreement between you and your creditors to settle your debts for less than the full amount owing. This option may be a good fit for those who have multiple debts, including tax debt. (NOTE: Only a Licensed Insolvency Trustee can help you reduce tax or government debt through a consumer proposal or a bankruptcy). 

3. Bankruptcy: Bankruptcy is a legal process that can help you get rid of most of your debts, including tax debt. However, bankruptcy should only be considered as a last resort as it can have long-term consequences on your credit rating and financial future.

A licensed insolvency trustee like Andrea ORR can provide you with advice and guidance on which debt relief option is best for your specific situation. Licensed insolvency trustees can also help you negotiate a payment arrangement with the CRA and assist you in filing a consumer proposal or bankruptcy if necessary.

If you have tax debt in Canada and are unsure of what to do, don’t hesitate to reach out to a licensed insolvency trustee for assistance!