Oddly, this is one of the single, most universal question I get asked by people inquiring about filing for bankruptcy. Think of how long the odds are of winning, yet almost everybody worries about it being taken away if they win. That is so Canadian.
A common question Licensed Insolvency Trustees field is “How is my credit rating affected if I file a bankruptcy or a proposal?” Generally by ‘debt consolidation’ they are referring to a Consumer Proposal, which is a form of that. But let’s deal with bankruptcy first.
Taxes owing and unfiled tax returns are a serious issue in Canada. Canada Revenue Agency (CRA) has always taken a tough approach to individuals or businesses who are in arrears, either through unpaid taxes or having not filed returns. Filing tax returns is a statutory duty under the Income Tax Act (ITA) in Canada. Failure to do so can land you in trouble with CRA.
This rather broad term can mean many things depending on the situation, the person in question or what the desired outcome is. It also is often misused by people when they are referring to a financial course of action.
Licensed Insolvency Trustees spend a lot of time dispelling myths about bankruptcy in general. There is a lot of misinformation on the internet, especially, which people often take as gospel: if it’s in writing, it must be true! Let’s take a minute to review some of the most common ones we hear.