2012-11-29
Yes, they are released in a bankruptcy, or consumer proposal for that matter.
Many people are confused about this issue primarily, I think, because they have read websites relating to bankruptcy proceedings in the USA where income tax debts are generally not released. In Canada all debts that a person owes are released in a bankruptcy with the exception of a very few specifically listed types of debts (alimony and child support, fines and penalties imposed by a court etc.). Income tax (and generally debts due to the government) are not specifically listed and they ARE therefore released.
I should also note that there is no authority under the Income Tax Act for CRA to settle a debt for some lessor amount but we can, and do, settle debts owing to CRA through Consumer Proposals Frequently. Please do not hesitate to call me at 306-790-7904 if you would like further information or wish to discuss.
2025-10-06
MNP Consumer Debt Index
Ontarians’ financial vulnerability is intensifying as persistent economic uncertainty, concerns about borrowing costs, and employment anxiety weigh on household confidence.
2025-10-06
MNP Consumer Debt Index
The financial vulnerability of Saskatchewan and Manitoba residents is intensifying as their financial cushions shrink and more households edge closer to insolvency.
2025-10-06
MNP Consumer Debt Index
Albertans’ financial vulnerability is intensifying as persistent economic uncertainty, concerns about borrowing costs, and employment anxiety weigh on household confidence.
