If you owe money to the Canada Revenue Agency, you have legitimate options. The CRA can arrange payments over time, and in qualifying circumstances it may grant relief from penalties and interest. In some cases, tax debt can be included in a consumer proposal or bankruptcy as unsecured debt, subject to the rules. DACL does not negotiate with the CRA and is not a tax or legal advisor. We assess your situation, explain your options, and refer you to the right professional.
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CRA tax debt is money you owe to the Canada Revenue Agency, usually unpaid income tax, but it can include other balances the CRA administers. The CRA has collection powers that other creditors do not, which can include garnishing wages or registering a lien, depending on the situation.
To be clear, those powers are real, but they are not a reason to panic. The CRA generally prefers to arrange repayment, and there are defined options for dealing with tax debt. The point of this page is to lay them out accurately.
The CRA offers two routes worth understanding first.
In some cases, tax debt can be included in a formal insolvency process. Certain tax debts can be treated as unsecured debt in a consumer proposal or a bankruptcy, subject to the rules of the Bankruptcy and Insolvency Act and any security or priority the CRA holds.
A Licensed Insolvency Trustee confirms what applies to your specific situation, because the treatment depends on the type and status of the debt. You can read about what a consumer proposal is and how bankruptcy works.
Here's what to watch for. Some companies advertise that they will "erase" or "settle" your CRA debt. There is no general CRA debt-forgiveness program. Relief is limited and discretionary, and it mostly applies to penalties and interest. If a company promises to make your tax debt disappear, treat that as a red flag and check the claim against the CRA's own published information.
DACL is a debt assessment and referral service. We review your situation, explain the legitimate options for tax debt, and refer you to the right professional. We do not negotiate with the CRA, we do not represent you to the CRA, and we are not a tax or legal advisor.
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We review your situation and explain the legitimate options for tax debt in plain language.
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Where a formal insolvency option may apply, we explain it and connect you with a Licensed Insolvency Trustee. Where a CRA arrangement is the right step, we point you there.
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DACL is not a Licensed Insolvency Trustee, a lender, a law firm, or a government program. We do not negotiate with the CRA or represent you to the CRA.
We've been helping Canadians since 2009. Here is what people ask most:
Options can include a CRA payment arrangement, applying for taxpayer relief on penalties and interest, and, in some cases, including tax debt in a consumer proposal or bankruptcy.
No. DACL does not negotiate with the CRA and is not a tax or legal advisor. We help you understand your options and refer you to the right professional.
In some cases, tax debt can be included as unsecured debt, subject to the rules and any CRA priority. A Licensed Insolvency Trustee confirms your specifics.
The CRA has collection powers that can include garnishment, and the specifics depend on your situation.
There is no general CRA debt-forgiveness program. Relief is limited and discretionary, mainly for penalties and interest in qualifying circumstances.
A short, free, confidential assessment is the simplest way to understand which options may apply to your tax debt and what to do next. There is no cost and no pressure.
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By Ishank · Debt Education & Content · Debt Advisors Canada
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General information, not legal, financial, or professional advice. Confirm your situation with a licensed professional. Debt Advisors Canada is not a Licensed Insolvency Trustee, a lender, or a government program.