For individuals and businesses with significant tax debts and limited income, filing bankruptcy may be their only answer. With the ever-increasing popularity of bankruptcy filing, more and more individuals are expected to come under its influence and find themselves looking for a fix. This is why there were over 99,000 insolvencies in Canada in 2020 alone.

So if you’re thinking of filing one as well, you need to read this guide. This article will help you find out how bankruptcy consulting services in Canada can help you have your tax debts discharged and how you can get a fresh financial start.

Can Bankruptcy Consulting Services in Canada Help Me With Tax Debts?

Yes, there are lots of excellent bankruptcy consulting services in Canada that can help you resolve income tax debts.

They will first look at your financial situation and future income possibilities and then decide whether to file for bankruptcy or take any other route. There are typically three options available discussed below:

Tax Relief:

You can apply for tax relief if you’re unable to pay taxes due to things like illnesses, a natural disaster, or financial problems that are beyond your control.

However, keep in mind that your interest and penalties may get canceled if you qualify for this, but you’ll still have to pay the principal amount.

Consumer Proposal:

You can file a consumer proposal, which is an agreement where you can pay the government a negotiated amount (less than what you currently owe).  A consumer proposal is a legally binding contract that is overseen by a licensed insolvency trustee.

You can either negotiate a lump sum settlement over a specific time period or pay monthly payments.

Bankruptcy:

This is typically the last option, and those with substantial tax debt or refused consumer proposals go for bankruptcy. The filing process starts with you hiring bankruptcy consulting services in Canada, and if they decide your financial situation calls for a bankruptcy filing, a licensed insolvency trustee will help you complete all the required forms for declaration. Once you’ve filed and registered bankruptcy with the Office of the Superintendent of Bankruptcy, the process will start that may last 9-12 months.

Once you finish your bankruptcy duties, you will be relieved of your tax debts. Keep in mind that the bankruptcy will stay for six years on your record.

Parting Words:

If you cannot pay your tax debt and things are just not improving no matter how hard you try to get rid of this stressful situation, it might be time to hire bankruptcy consulting services in Canada. Remember, a professional consultant will not push you in the direction of filing bankruptcy right away.

They will sit with you, talk about your financial situation, and then figure out whether bankruptcy is the right option or if you can take a different route.  You can call National Credit Help to schedule a consultation right now!