CRA Tax Debt Relief in Canada
Deal with CRA tax debt you can’t pay. Our Licensed Insolvency Trustees can explain options like payment arrangements, consumer proposals and bankruptcy.
- Stop wage garnishments
- Ways to protect your assets
- Government regulated
or call 587-701-5681
Free and confidential consultation
Regulated by the Office of the Superintendent of Bankruptcy
Updated:
How do I get CRA tax debt relief in Canada?
While you cannot have tax debt directly forgiven by the CRA, taxpayer relief provisions help you cancel or waive penalties and interest caused by financial hardship or circumstances beyond your control. Neither reduces the tax itself.
A CRA payment arrangement is a structured payment plan that lets you pay the full amount over a longer period.
You can settle your unsecured debts, including CRA debt, for less than you owe by making an affordable monthly payment through a consumer proposal.
If you’re drowning in debt that you cannot realistically repay, bankruptcy can fully eliminate tax debt and other unsecured debts.
Only a Licensed Insolvency Trustee can legally restructure your debts through a consumer proposal or bankruptcy.
Moses Advisory Group’s trustees are licensed and regulated by the Office of the Superintendent of Bankruptcy. We help clients across Alberta, Ontario, British Columbia, Nunavut and the NWT.
Get free, impartial debt advice from a Licensed Insolvency Trustee. We’ll call to explain your options.
1-hour callback (working hours)
No obligation.
Can the CRA garnish wages or freeze your bank account?
The Canada Revenue Agency (CRA) can collect unpaid taxes by quickly garnishing wages and bank accounts.
They can also seize assets, offset benefits, withhold credits, divert tax refunds and place a lien on your property.
The CRA can issue a Requirement to Pay to your employer or bank without needing a court order. This requires them to send the funds immediately, bypassing the usual court process.
Filing a consumer proposal or bankruptcy grants an automatic stay of proceedings under the Bankruptcy and Insolvency Act that immediately stops CRA wage garnishment and other CRA collection actions.
Source: Bankruptcy and Insolvency Act – Section 69.2 (consumer proposal) and Section 69.3 (bankruptcy)
Can the CRA forgive your tax debt?
Not the tax itself. Under the CRA taxpayer relief provisions, you can request the cancellation or waiver of penalties and interest, but no CRA program forgives the principal amount owed.
The Canada Revenue Agency will not settle tax debt for less than the full amount owed, unless it’s through a consumer proposal or bankruptcy. The CRA has no authority to write off the tax itself on request. Its discretion covers penalties and interest only.
Call us on 1-587-701-5681 or
Your options
CRA tax debt relief options
A payment arrangement allows you to pay your tax debt in installments. The CRA’s Taxpayer relief provisions can cancel or waive penalties and interest, but your original debt won’t go away. Consumer proposals and bankruptcy can eliminate part or all of your tax debt.
| Option | What it does | Best if |
|---|---|---|
| Payment arrangement | Lets you pay the full balance over time, but interest is still applied. | You can pay in full if given more time. |
| Taxpayer relief | You ask the CRA to cancel penalties and interest. | Penalties and interest accumulated due to circumstances beyond your control. |
| Consumer proposal | A legal process under the Bankruptcy and Insolvency Act that lets you repay less than the full amount | You can’t pay your debts in full but have steady income. |
| Bankruptcy | Discharges most unsecured debt, including CRA debts. | There’s no realistic way to repay your debts. |
Both a consumer proposal and bankruptcy can eliminate CRA income tax and GST/HST arrears as unsecured debt. Interest continues to accumulate daily until you resolve the debt through one of these methods.
Source: Canada Revenue Agency – Payment arrangements
What if you haven’t filed your returns?
If you have not filed your returns, the Voluntary Disclosures Program lets you correct unfiled returns, unreported income, or ineligible expenses.
If you come forward before the CRA contacts you, they can cancel all of the penalties and 75% of the interest. If you apply after the CRA has already reached out, the interest relief is reduced to 25%. In both cases you still pay the tax, but a successful application protects you from prosecution.
This program is different from the CRA’s taxpayer relief provisions. Taxpayer relief helps if you already reported your balance, but something beyond your control affected you. The Voluntary Disclosures Program is for filings that were incorrect or missing.
Regardless, you must bring unfiled returns up to date. If you have missing returns and a balance you cannot pay, these issues often overlap.
Source: Canada Revenue Agency – Changes to the Voluntary Disclosures Program
See the difference
Before help vs after help
See how much you could save.
Gabriella was paying $720 towards debt each month
Credit Cards
$9,225.20
Payday Loan
$7,231.15
Bank Loan
$5,860.20
CRA Debt
$4,078.52
Total Debt
$26,395.07
Monthly payment before and after
Before help
$720
After help
$160
Estimate your new monthly payment
Quick answers. Fast and free.
Example only. Individual results vary.
All types of CRA debt
A consumer proposal or bankruptcy can deal with every kind of CRA debt
Income tax arrears
GST/HST arrears
Penalties and interest
CERB overpayments
EI overpayments
Benefit overpayments
Credit cards
Unsecured debts
A Canada Revenue Agency (CRA) tax lien registered on your property title before you file for bankruptcy or a consumer proposal survives the insolvency process as a secured claim.
How it works
How to get help with CRA tax debt
Check if you qualify
Answer a few quick questions
You’ll get a call back
We review your CRA debt and any collection action
Compare every route
From a payment arrangement to various debt relief options
No in-person visit needed.
Meet your Licensed Insolvency Trustee
Robert Johnson is a Licensed Insolvency Trustee (LIT) with Moses Advisory Group Inc. He brings over 20 years of experience and has helped thousands of people across Alberta get back on their feet through consumer proposals, bankruptcy, and debt restructuring, including tax debt owed to the CRA.
Robert is licensed by the Office of the Superintendent of Bankruptcy and is a member of CAIRP, the Canadian Association of Insolvency and Restructuring Professionals.
“The CRA is the creditor people fear most, and usually the one they wait longest to deal with. My job is to explain every option clearly and help you negotiate with the CRA and eliminate tax debt.”
Robert Johnson, CPA, CA, CIRP, Licensed Insolvency Trustee
Call us on 1-587-701-5681
Reviews
Trusted by Canadians
Real reviews from real clients.
I had a wonderful experience with the Moses Advisory team, especially Janelle. She was kind, supportive, and made the entire process so much easier. I feel at ease and like a huge weight has been lifted off my shoulders.
Soheila Adelian
Nikolas was very kind, helpful and respectful. He explained very clearly and answers all the question politely. He is very professional and you can feel his empathy, sincerity and willing to help. Highly recommended.
Jaime Torres
The Moses Advisory Group team has been excellent. Professional and knowledgeable guidance. Great help in explaining the process and providing the necessary support. Recommend to anyone having financial issues to take advantage of their expertise.
Oluwaseun Fanawopo
Excellent! I was heavily in debt and extremely stressed out, but after the first consultation, they made a very affordable proposal for me. Since that day, my financial situation has improved tremendously! I would highly recommend them to anyone who is suffering from heavy financial difficulties.
Kashaija Stephen
Thanks to Neil from Moses Advisory Group for all your help. I appreciate all your help and understanding through what has been a difficult time. I would highly recommend them.
Candice Knight
Working with this group is great and they helped me greatly. Highly recommend for those with financial problems. Great job guys and thank you so much for all your help.
May Niegos
I’m very glad that this company was able to give us a lifeline during our financial problems. I’m very grateful for all the support especially to Niko who has helped and guided me along the way. I appreciate your support and very kind excellent service. Thank you all and more power to your company!
Jun Abanilla
Excellent service. Professional advice. Anyone who has financial questions and concerns will benefit from visiting their office. What a great experience. Thank you! Thank you!
Isabel Choconta
I’m very happy with Moses. The staff was very helpful, explained things well and are very knowledgable. They always answer the phone when I call or return phone call the same day. I am very thankful for them.
Rory Balchan
More reviews
How long can the CRA collect a tax debt?
The CRA can collect personal income tax and GST/HST for ten years, starting on the 91st day after your notice of assessment is sent. Payroll deductions have a shorter collection period of six years.
Once the debt becomes statute-barred, the CRA can’t collect it. However, the limitation period resets if you make a payment or acknowledge the debt in writing.
It will also reset if you file an objection, or if the CRA garnishes your wages, keeps your tax refund, or certifies the debt in Federal Court.
Waiting it out isn’t a viable plan. Interest compounds daily, and contacting the CRA can reset it for another ten years. Speak to a Licensed Insolvency Trustee today to get free advice.
Source: CRA – How long a debt can be collected
FAQs
CRA tax debt relief FAQs
If you cannot pay a CRA debt, ignoring it can make things worse. Interest compounds daily, penalties are applied, and the CRA can start collection action without going to court.
You have options if you act quickly. You can set up a payment arrangement, request relief under the taxpayer relief provisions to cancel penalties and interest, or file a consumer proposal or bankruptcy to reduce your debt.
A Licensed Insolvency Trustee can lay out all the options available to deal with your tax debt.
No. You can call the CRA to set up a payment arrangement or start a taxpayer relief request, but the agent on the line has no authority to settle your tax for less than you owe.
No. CRA debt won’t disappear, and interest compounds daily, so the balance increases. To resolve CRA debt, you can pay it off, make a taxpayer relief request for the penalties and interest, or file a consumer proposal or bankruptcy.
There’s no CRA program that reduces the tax you owe. Taxpayer relief can cancel penalties and interest, and a payment arrangement gives you more time, but reducing the principal involves filing a consumer proposal or bankruptcy with a Licensed Insolvency Trustee.
Yes, a consumer proposal can eliminate CRA debt. Personal income tax and GST/HST arrears are unsecured debt, so a consumer proposal eliminates them just like a credit card balance. The one exception is a lien the CRA registered on your property before you file, and that survives as a secured claim.
Yes. CERB, CRB and EI overpayments are ordinary unsecured debts owed to the Crown, so they can go into a consumer proposal or be discharged in bankruptcy alongside your tax debt. The exception is a benefit obtained through fraud or misrepresentation, which survives a discharge under section 178 of the Bankruptcy and Insolvency Act.
Usually, yes. The Voluntary Disclosures Program can cancel all penalties and 75% of the interest if you apply before the CRA contacts you. You will still need to pay the tax.