Business Bankruptcy in Canada is primarily governed by the Bankruptcy and Insolvency Act (BIA), a…
Another settling of Tax Debt! The person we are helping, we will call him “the Debtor,” owed Canada Revenue Agency approximately $155,000.00 in unpaid income taxes. The Debtor was an honest person who unfortunately got caught up in all of these tax shelter scams.
There is an old saying “If it sounds too good to be true it probably is!!!” The Actual tax debt was approximately $105,000.00 but by the time he was re-assessed and penalties and interest totaling another $50,000.00 were added, his indebtedness to CRA ended up being approximately $155,000.00.
The Debtor sought our help after unsuccessfully trying to appeal the matter.
The Debtor earns a decent wage, over $5,000.00 a month. If the Debtor had filed bankruptcy, he would have been required to settle for equity in his house of approximately $35,000.00 plus his bankruptcy would have been extended due to his income. In Bankruptcy, we estimated he would have had to pay in addition to the equity, approximately $15,000.00 from his income (surplus income).
We filed a Consumer Proposal for him offering to settle the tax debt by offering CRA $60,000.00 which included our fees. CRA agreed to accept $65,000.00 payable over the next five years.
This resulted in the Debtor settling his tax debt and avoiding bankruptcy by paying a monthly payment he can afford.
When you see ads on buses or billboards claiming they can settle your debts for 20 cents on the dollar, be skeptical. Yes, sometimes 20 cents is realistic but no two situations are the same. We believe that finding the realistic number is key. After all, had the debtor offered 20 cents on the dollar, the parties would have been so far apart that reaching a realistic settlement number would have been unlikely.
LICENSED INSOLVENCY TRUSTEE