Facing Bankruptcy? Protecting Assets From CRA
Posted On: 29/06/17 - 0

Facing Bankruptcy

Very Important To Separate Personal From Business If Facing Bankruptcy

Hopefully, you will never experience facing bankruptcy. But here are some important tips to keep in mind in the event of. Never use your home address as your business address. If you have a business location outside of your house use that address and location at all times. In the event that the CRA collections issues a direction to the sheriff to prepare a report of assets, the sheriff will go to the business address.

If Your Corporation Owes Money To The CRA

If your corporation owes money to the CRA, attempt to make a payment arrangement.  The CRA is very reasonable and will work with you to make a prepayment plan. A payment period of 6 – 24 months has a better chance of acceptance by CRA collections. You provide post-dated checks for the payment period.

Make Sure You Keep Proof

If a payment plan has been agreed upon the CRA will require post-dated checks.  You will need to provide this proof to the sheriff who will include this information in his report of the assets.  Make sure there is enough funds in the bank account to cover the amount of the checks. A bounced check forces the CRA collections officer to look for other sources to obtain the money.  It’s very important to keep all CRA filings and payments up to date during the period of the payment arrangement. This includes GST, payroll taxes, and income taxes, etc.

Repayment Tips

Apply for interest relief while the corporation is paying off the debt to the CRA. If accepted by CRA, the outstanding balance will likely be decreased.  If you can make an additional large payment while paying the arrangement, this will reduce the interest on your outstanding balance. Be honest with the CRA collections officer. 

Building A Workable Relationship

If the CRA collections officer requests information, be sure to provide it. Try to build trust with the collections officer, so that the person may show some discretion. Be polite to the CRA collections officer. She or he is just doing their job.  In some cases, it’s possible that there is potential of a personality conflict between the CRA collections officer and yourself. If this is the case, request a meeting with he or she, their supervisor and yourself. Attempt to improve the relationship to resolve your tax issues. Everyone once to have workable, amicable relationship with the same end goal.​​​​​​​

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