Canada Revenue Agency Q & A
Hi, I’m a CA sole practitioner. I have a question regarding an individual client who owes CRA a substantial amount of unpaid personal income tax and director’s liability on HST/source deductions. My client advises they have negligible assets other than their principal residence owned 50/50 with their spouse who has no such CRA liabilities. They are both seniors with health issues.
Q1: Is there any risk of loss of their home due to CRA debt?
Q2: If yes to #1, what steps should they consider to prevent the loss of their home?
Q3: In general, what specific approach would you advise in order to eliminate or reduce this significant personal debt?
Yes, there is risk and CRA can put a lien on the debtor’s house for the unpaid debt. To prevent this they have options and can choose to file a consumer proposal or bankruptcy. If they do choose one of these options, CRA can no longer put a lien on the property. In terms of question #3, the specific approach would depend on a variety of details such as: the option they choose, the value of the house and the balances outstanding on the mortgage.
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