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What We Do

Eliminate Your
CRA Tax Debt
For Good

Behind on income tax, HST, or payroll source deductions? A Licensed Insolvency Trustee can stop CRA collection action, freeze interest, and reduce what you owe — often by up to 80%.

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Final NoticeNo. 2024
CRA · NoticeNo. 2026-04
Balance Owing
$48,200.00
RESOLVED
CRA Debt Reduced
Under Federal Law
Stop CRA collection action
Freeze interest & penalties
Reduce tax debt up to 80%
One affordable monthly plan
The Basics

What Is CRA Tax Debt?

Tax debt is any amount owed to the Canada Revenue Agency — including unpaid personal income tax, HST/GST, payroll source deductions, and the interest and penalties that pile on top.

CRA debt is treated differently from ordinary debt. The CRA has extraordinary collection powers that other creditors don't: they can freeze your bank account, garnish your wages, and register a lien against your home — all without going to court first.

Interest compounds daily, so what starts as a manageable balance can double in a few short years if it's left unaddressed.

Personal Income TaxHST / GSTPayroll Source DeductionsSelf-Employed TaxDirector Liability
CRA Statement of Account
Sample illustration
Income tax owing (2022)$22,400.00
HST owing$14,800.00
Interest & penalties+$11,000.00
Balance owed to CRA$48,200.00
In a Consumer Proposal~$12,000
CRA debt is unsecured — it can be reduced through a Consumer Proposal alongside your other debts, with interest stopped on the day you file.
If You Ignore It

What the CRA Can Do to Collect

The CRA has powers most creditors don't. Once a balance is overdue and a Notice of Assessment has been issued, they can act without ever filing a lawsuit.

Freeze your bank account
A Requirement to Pay served on your bank can freeze and seize the funds in your chequing or savings account without notice.
Garnish your wages
CRA can serve your employer directly and take up to 50% of employment income, or 100% of self-employment payments owed to you.
Lien on your home
The CRA can register a lien against your property at the land registry — blocking a sale or refinance until the debt is paid.
Daily compound interest
Interest is charged daily on overdue balances and is compounded — meaning interest is charged on the interest already owing.
Withhold benefits & refunds
CRA can offset future tax refunds, GST credits, and child benefit payments against an outstanding tax balance.
Director liability
If you're a director of a corporation with unpaid HST or payroll source deductions, the CRA can pursue you personally for those amounts.
How You Got Here

Why Tax Debt Snowballs

Most people don't plan to fall behind with the CRA. It usually happens after a life event: a contract job where no tax was withheld, a year of self-employment, a business that closed with HST owing, a separation, or a missed filing that compounded for several years.

Once a balance is on file, daily compound interest does its work quietly - and the longer it sits, the more aggressive CRA collection becomes. By the time most people call us, the original tax debt has grown by 30% to 60% in interest and penalties alone.

The good news: tax debt is treated as unsecured debt in a Consumer Proposal or Bankruptcy. It can be reduced or eliminated alongside your other debts.

Unpaid Tax Debt Over TimeCompounding Daily
$20.0k
$22.6k
$25.4k
$27.9k
$30.7k
Yr 1Yr 2Yr 3Yr 4Yr 5
Daily compound interest
doubles balances quickly
A $20,000 tax debt left untouched for five years can grow past $30,000 — without a single new dollar owed.
Your Options

How to Resolve Your Tax Debt

There are 4 typical options. We'll help you compare them and choose the right one in a free consultation.

1
Pay the CRA in Full
If you have savings or can borrow against an asset, paying the balance closes the file immediately and stops further interest. The simplest option — but rarely realistic once the debt is over $20,000.
2
CRA Payment Arrangement
Negotiate a monthly payment plan directly with a CRA collections officer. The debt itself isn't reduced, interest keeps accruing daily, and the CRA can revoke the arrangement at any time if you miss a payment or file a return late.
3
Taxpayer Relief Application
A formal request to the CRA to cancel interest or penalties in cases of financial hardship, serious illness, or CRA error. The principal tax owing is not reduced, and approval is discretionary — most applications are partially or fully denied.
4
Consumer Proposal or BankruptcyMost Effective
The most powerful option. The moment you file, an automatic stay of proceedings stops CRA garnishments, frozen accounts, and Requirements to Pay. Interest stops. Your tax debt is reduced (often by up to 80%) and rolled together with credit cards, loans, and other debts into one affordable monthly payment.
Common Questions

Tax Debt Frequently Asked Questions

Quick answers to what we get asked the most about tax debt in Ontario.

Q
Can CRA tax debt be included in a Consumer Proposal or Bankruptcy?
Yes. Income tax, HST/GST, and payroll source deductions are unsecured debts that can be reduced or eliminated through a Consumer Proposal or Bankruptcy filed with a Licensed Insolvency Trustee — even if the CRA has already started collection action.
Q
Will the CRA stop collections if I file?
Immediately. A federal stay of proceedings takes effect the day you file. Wage garnishments end, frozen bank accounts are released, and any Requirement to Pay served on third parties is lifted.
Q
Does the interest on my tax debt keep growing?
Until you act, yes — the CRA charges compound daily interest on overdue tax. The day a Consumer Proposal or Bankruptcy is filed, interest stops accruing on the entire balance.
Q
I haven't filed taxes in years. Can I still get help?
Yes — and you should act sooner rather than later. Outstanding returns must be filed before a proposal or bankruptcy can be completed. We work alongside accountants every day and can refer you to one if needed, then include the resulting tax debt in your filing.
Q
Can the CRA take money without a court order?
Yes. Unlike ordinary creditors, the CRA can issue a Requirement to Pay to your bank or employer, register a lien on your home, and offset your tax refunds — all without going to court first.
Q
How much can my tax debt be reduced?
It depends on your income, assets, and overall debt load. In a Consumer Proposal, tax debt is often reduced by up to 80% — repaid as a fraction of what's owed over up to five years, interest-free. In a Bankruptcy, eligible tax debt is typically discharged entirely.
Q
Can the CRA come after my house or RRSPs?
Not quite the same for both. If you own a home, the CRA can register a lien against the property and, in serious cases, force a sale to recover the debt. RRSPs are different — the CRA generally cannot seize funds held inside a registered account. It can, however, send your RRSP institution a Requirement to Pay that redirects any future withdrawal straight to the CRA instead of to you. Filing a Consumer Proposal or Bankruptcy halts these actions immediately and, in most cases, lets you keep your home and RRSP.

Stop Worrying About the CRA

Schedule your free, confidential, no-obligation consultation today. In 30 minutes, we'll have a clear plan to deal with your tax debt — once and for all.

Book My Free Consultation →
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