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The intention of Canadian bankruptcy law is to provide honest and overextended debtors the opportunity for a financial fresh start.
Do Government Taxes Go Away In A Bankruptcy Or Proposal
2010-12-16
Most types of taxes go away in a bankruptcy, just like a bank loan or a credit card. This applies to personal income taxes, corporate income taxes, GST debt, Director's Liability on corporate tax or GST, etc. Interest and penalties on those debt also goes away. You have to watch out, though, for registrations that Canada Revenue Agency ("CRA") can make against your property. If, for example, you own your home and if you owe personal income taxes, CRA can apply for a Federal Court judgment against you and they can then register that judgment against your home. If they do that, it's as though they have a mortgage on your home. If you do a bankruptcy and choose to keep your home, you will still have to pay the amount of CRA's judgment - a bankruptcy won't get rid of it. If you file a bankruptcy before any registrations are in place, CRA can't file any registrations after the bankruptcy has started. Judy Scott - Trustee Meyers Norris Penny Limited Port Moody - Burnaby - Maple Ridge 604.949.2113 [email protected]
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