Getting Help With Tax Debt

Owing Money to the CRA – Tax Debt Help

Lots of Canadians are worried about owing money to the CRA.

It’s not very hard to see why.

The Canada Revenue Agency have great collection power at their disposal.

If you owe them a lot of money, they have the potential to make life very challenging to you.

They can garnish your salary, taking what you owe directly from your earnings.

They may even freeze your bank accounts and in some extreme cases will seize your assets.

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Still, while this may be a worrying thought to many, it’s important to remember that you are not alone.

Nor are you without options.

Here we’ll look at how you can honour your debts to the CRA without losing your valued assets.

Does the CRA enter into payment plans?

Unfortunately, unlike most creditors, the CRA does not negotiate debt management plans with individuals.

Nor will they be willing to write off any of the outstanding debt.

Under some specific circumstances, they may be willing to waive penalties and interest charges.

These may include:


  • If you were forced to miss or delay a payment due to circumstances out of your control, like a serious illness or natural disaster.
  • If payments were filed late as a result of a processing or administrative delay.
  • If you can demonstrate that you are in extreme financial hardship.


Still, it’s important to note that the above only pertains to the waiving of charges and penalties, not to any portion of the debt outstanding.

So, how do you deal with Tax Debt?

As we can see, the CRA can be very inflexible when it comes to your tax debt.

But don’t worry!

This doesn’t mean that you are without options.

While you may not be able to engage in direct negotiations to write off or stagger negotiations, there are certain legal modes of recourse which can make your tax debts easier to manage.

Under Canadian law, tax debts can be written into either a Consumer Proposal or a filing for Personal Bankruptcy.

However, neither of these legal proceedings should be entered into lightly, and it’s important to make an informed decision as to which best suits your needs and circumstances.

Let’s take a look at both…

Consumer Proposals

A Consumer Proposal can help to make your tax debt more manageable and help to mitigate the lack of leniency offered by the CRA itself.

A Consumer Proposal can only be filed by a Proposal Administrator.

They must also be a Licensed Insolvency Trustee.

Click Here to find a Licensed Trustee near you.

Upon meeting with an Administrator, your financial situation will be reviewed and they will help you to make a fair and reasonable offer to your creditors.

This offer will then be sent to the CRA (and any other  creditors) for review.

If your creditors vote in the majority to accept your proposal, then you and they are legally bound by its terms.

If you are currently unable to pay your tax debt, you should speak with a Proposal Administrator before pursuing a Consumer Proposal.

You can also find out more about Consumer Proposals on our website Here.

Personal Bankruptcy

If you decide that a Consumer Proposal is not for you, if a Proposal Administrator advises against it, or if your proposal is not accepted by the majority of your creditors, another option is Personal Bankruptcy.

CRA debt can legally be included in a Personal Bankruptcy filing, and can help you to get the financial fresh start that you need by writing off most (or all) of your debts.

A Trustee will review your financial situation and advise you on what options are available to you.

They will also be able to review your assets and ensure that you are still able to retain possession of any exempt assets if you decide that Personal Bankruptcy is the best solution for you.

We’re here to help!

We understand that tax debt can be a source of great distress.

However, we want you to know that you’re not alone.

We can provide impartial advice on how best to manage your CRA debts.

Why not call us on (877)879-4770 to arrange a callback?

It’s 100% confidential, zero-obligation and completely risk-free.

So, what do you have to lose?

Since we opened our doors in 1999, we’ve helped over 200,000 Canadians just like you to get the fresh start they deserve and liberate themselves from their personal debts.

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Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

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