Question: I’ve gotten myself into a situation where I owe several years of back taxes to the CRA and they are the only creditor I have. Due to the penalties and interest it will be impossible to pay them. Can I still make application for bankruptsy if I only have one creditor? I’ve been told you can’t go bankrupt unless you have multiple creditors?
thanks
Answer: Yes, you can declare bankruptcy anywhere in Canada, even if you have only one creditor.
There are a number of options for dealing with tax debt. Bankruptcy is one of them. It may also be able to make repayment arrangements directly with Canada Revenue Agency.
You should also be aware that if you owe more than $200,000 in tax debt, and that debt is 75% or more of your total debt, a court hearing will be required to discharge your tax debt. A bankruptcy trustee can provide you with more information.