Government Debts And Incorporated Companies

Saturday, December 29, 2012 - 05:00

Consumer Proposals, Bankruptcy, Business Concerns, Government Debt


At Welker & Associates we help owners of incorporated companies deal with their debt issues, including government debt. There are three main government debts that business owners have to deal with:

  1. Corporate income tax
  2. HST
  3. Payroll source deductions

Corporate income tax is a debt which owed solely by the corporation and is not the responsibility of the directors. However, HST and payroll source deductions are director’s liabilities. As director’s liabilities these debts are owed jointly and severally by the directors of the corporation personally, and can be included in and discharged by filing a consumer proposal or personal bankruptcy just like any other debt. 

Government debts only have special rights if you do not deal with them by virtue of the enhanced garnishment provisions provided for in the Income Tax Act and Excise Tax Act. These enhanced garnishment provisions allow the government to freeze your bank, issue a requirement to pay, garnishee wages or put a lien on your house without a court order. Filing a consumer proposal or bankruptcy immediately stops all government action and prevents them from taking any further action against your assets and/or income.  

If you are considering bankruptcy, contact our office so we can review your situation and discuss all of your options.

Latest Posts

Get a Handle on Your Debt!

The level of household debt in Canada continues to rise. It almost feels like no one is immune to household debt. If your debt is starting to feel overwhelming, minimum payments might keep collection calls from coming but chance are it won’t keep them away forever.  

September 15, 2019

Money Management