Dealing with tax debt owed to the Canada Revenue Agency (CRA) can be stressful and overwhelming. If you're struggling to pay off your tax debt, you're not alone. Many Canadians find themselves in a similar situation. Fortunately, there are debt relief options available to you.
In this blog, we'll discuss how consumer proposals and personal bankruptcies can eliminate CRA tax debt.
A consumer proposal is a debt relief option that allows you to make a formal offer to your creditors to settle your debts. This proposal is made through a Licensed Insolvency Trustee (LIT), who will work with you to develop a proposal that is realistic and affordable. Once the proposal is accepted by your creditors, you will make one monthly payment to the LIT, who will distribute the funds to your creditors.
When you file a consumer proposal, you can include any tax debt owed to the CRA. The CRA is considered a creditor like any other, and it will be included in the proposal. If your proposal is accepted by your creditors, your CRA tax debt will be included in the settlement, and you will no longer owe the CRA any money. This can be a significant relief for many Canadians struggling with tax debt.
Personal bankruptcy is another debt relief option that can help eliminate CRA tax debt. Once your bankruptcy is discharged, you will be free from most of your debts, including any tax debt owed to the CRA.
Conclusion
If you're struggling with CRA tax debt, know that debt relief options are available. Consumer proposals and personal bankruptcies are two options that can help eliminate your tax debt and provide you with a fresh start. It's important to speak with a licensed insolvency trustee to understand which option is best for you and to get the guidance and support you need to achieve debt relief.
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