Canada Revenue Agency Debt Relief in Ontario

If you owe tax debts we can help

Did you know there are Canadian debt relief programs that can help with CRA Debt?

Discover how to break free from debt in Canada without declaring personal bankruptcy or turning to expensive debt consolidation loans. Take control of your finances today!

You deserve a fresh start.

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What happens if you don’t pay your Canada Revenue Agency tax debt?

The CRA holds tremendous power to collect unpaid tax debt – and can exercise it at will should you fail to pay what you owe.

Dealing with Canada Revenue Agency tax debt in Ontario – what are your options?

Before we explore each option, it’s important to note that only a consumer proposal and bankruptcy provide you with legal protection from the CRA’s collection powers. Both debt relief programs will immediately stop collection calls and protect you from lawsuits, wage garnishment, and asset seizure

Reduce your Canada Revenue Agency tax debt with a consumer proposal

By filing a consumer proposal, you can significantly reduce the tax debt you owe to the CRA. A consumer proposal is a debt relief program the federal government offers through the Bankruptcy and Insolvency Act (BIA). It allows you to negotiate a new payment plan with your creditors for any unsecured debt you owe, like credit cards and lines of credit. Tax debt also qualifies as unsecured debt.

This unique program will allow you to reduce your outstanding tax debt by up to 80%. As a result, you’ll have much more room in your budget to repay your remaining balance. As long as half of your creditors agree to the terms of the revised payment plan, you can make monthly payments to settle your debt over five years.

Richard Sklar explains the benefits of a Consumer Proposal in Ontario

A consumer proposal is the #1 alternative to personal bankruptcy.

With the help of a Licensed Insolvency Trustee, you can reach an agreement with your creditors to repay a fraction of the debt you owe.

How To File A Consumer Proposal In Ontario

In this video, a Licensed Insolvency Trustee explains to Mary and Paul that a consumer proposal might be the way to resolve their financial situation. The trustee tells them how a consumer proposal is different from bankruptcy and what they need to do.

You don’t need to pay anyone to access an LIT for a consumer proposal or a bankruptcy, and no one else needs to represent you.

Other Ways to Manage Canada Revenue Agency Debt

Pay your debt in installments

Unable to pay off your tax debt with a lump sum payment by the due date? If so, you can enter into an installment payment plan with the CRA

The flexibility of a monthly payment plan can relieve considerable financial pressure. You can spread your payment over a set time period based on what you can afford to pay each month. 

It’s crucial to remember that you’re required to repay your debt in full under an installment plan. The CRA won’t agree to any form of debt forgiveness. For this reason, hiring a debt settlement company to help you negotiate a reduced balance won’t do you any good.

Apply for taxpayer debt relief

If you’re in dire straits financially, you can contact the CRA and request to have your interest charges and penalties waived. To secure approval, you must demonstrate that you lack the means to pay off your tax debt due to extreme personal or financial circumstances.

You can ask the CRA to forgive interest and penalties for tax years going back up to 10 years from the date you file your request. To kickstart the process, complete and submit form RC4288.

Repay your Canada Revenue Agency tax debt using a debt consolidation loan

A debt consolidation loan is another option for paying off your tax debt. This loan enables you to combine multiple debts you owe under a single monthly payment plan. It also offers a low-interest rate, netting you savings on interest costs and making your payments more manageable.

However, let’s say you cannot secure a favorable rate. In that case, you won’t realize any benefit by transferring your tax debt to this kind of loan, aside from getting the tax authorities off your back. You’ll still be responsible for repaying the entire balance through your new loan. Also, any assets you own that secure the loan are up for grabs by your lender should you default.

Eliminate your Canada Revenue Agency tax debt by filing for personal bankruptcy

Is it possible to clear your tax debt through bankruptcy? Absolutely! Since 1992, the CRA’s status under the BIA has been that of an unsecured creditor. That means you can legally discharge your tax debt through bankruptcy (unless the CRA has already secured the debt through a lien on your assets).

Our professional recommendation

However, in both cases, you’re still under obligation to pay 100% of your balance. Depending on your tax bill’s size, these options may prove insufficient in providing the debt relief you need to resume a quality life. This is especially true if you’re already struggling to keep up with other debt obligations like credit cards.

If you need to take drastic action to get your tax debt under control, filing a consumer proposal is a superior alternative. You can legally discharge a large chunk of your debt – and you won’t have to pay a dime in interest charges or penalties on the remaining balance.

Bankruptcy is another option to consider. But only as a last resort, given the repercussions we mentioned.

Unsure of which path to take? 

If so, book a free consultation with one of our Licensed Insolvency Trustees. They’ll discuss your debt relief options in detail to see if a consumer proposal or bankruptcy is the ideal way to slash your tax bill.

Either way, you’ll get the chance to settle your CRA tax debt safely and effectively.

Our clients say it best

We take pride in what we do and hearing how we’ve made a positive change in our customer’s lives is the greatest reward we can receive.

We are here for you when you’re ready to live your best life debt-free!

Kelly Silke
Kelly Silke
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The staff at David Sklar are absolutely life changing and phenomenal people to work with. They are a well dedicated team whose personal mission is to truly help you turn your life around. Don’t be afraid to call them. Don’t be afraid to be honest to ask for the help you need. Rest assured no matter your debt load they will assist without judgement and deliver with compassion the best way forward to legally seal your debts and give you a real chance again at life. I highly recommend their services. They changed my life. They will gladly help you too. My personal consultant Trina Powell is an incredible, smart, and extremely supportive ally. But know you’re in good hands no matter who they assign to help you. Change your life today and pick up the phone and call them you’ll only be sorry you waited so long.