Filing for bankruptcy is never an easy option for business owners. The decision can feel like a personal failure and may leave one unsure about the future. Bankruptcy can certainly be difficult, it can also provide relief for those struggling to keep up with debts.
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:
Corporate income tax
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 have questions about your company and how bankruptcy will affect it, contact our office today. We are open late and on weekends and offer free, no-obligation consultations.