ARE YOU A HIGH TAX DEBTOR?
If you have high tax debts here are some things you need to know.
High tax debts are personal taxes over a value of $200,000 that constitute 75% or more of the debtor’s total unsecured debts. So for example if you owed Revenue Canada $300,000 for income taxes and only owed $100,000 on other debts you would be considered to be a “high tax debtor”.
If that were the case and you filed an assignment into bankruptcy you would not be eligible for either an “automatic discharge” or an “early discharge”. You would be required to attend at court in order to obtain a (absolute) discharge from the proceeding.
Depending on your circumstances, including your future capacity to make restitution, the Court may order that you make some form of repayment to the estate for an extended period of time – this is called a Conditional Order of Discharge.
If you are in such a debt position and you have assets or income that may be available to your creditors through a bankruptcy filing (and knowing the operation of Section 172.1 of the Bankruptcy & Insolvency Act) it may make more sense to file a Division One proposal rather than a bankruptcy.
Not all trustee firms will file Division One Proposals.
Contact us at 519-646-2222 to explore all of your options.