Owes cra>240,000

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Mimi

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Owes cra>240,000
« on: March 07, 2014, 06:46:08 AM »
I owe CRA lots of debt due to arrears and penalty  (gross negligence). I can not keep up my payments due to the interest. I went to consult a trustee. She said I will not get discharged from bankcruptcy. Does this mean that during bankcruptcy the interest will keep on increasing? My house is on foreclosure. Between the mortgage and cra debt I will still owe more than $100,000.00. Not including my loans. The trustee stated I will not qualify for consumer proposal. Please advise.

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NotATrust-E

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Re: Owes cra>240,000
« Reply #1 on: March 07, 2014, 09:28:52 AM »
There are several things going on at the same time here.

If you have unsecured debts of more than $250,000, you cannot file a consumer proposal. You can try to file a Division I proposal, but with CRA as your major creditor, you may not be all that successful. If your creditors reject a Division I proposal, you are automatically bankrupt.

I think what your trustee meant was that you will not get an automatic discharge from bankruptcy. The interest stops when you file any type of bankruptcy OR proposal, but if your trustee closes your file and you aren't discharged, the interest starts again.

There's also a special section of the act, 172.1. If you have more than $200,000 in tax debt AND this is more than 75% of your total unsecured debt, you will have to go to court to get your discharge.

So... It sounds like you may not be able to file a Consumer proposal, and a Division I proposal may not work for you. Bankruptcy may be your only option, but even then, depending on your specific circumstances, it could be complex.

I owe CRA lots of debt due to arrears and penalty  (gross negligence). I can not keep up my payments due to the interest. I went to consult a trustee. She said I will not get discharged from bankcruptcy. Does this mean that during bankcruptcy the interest will keep on increasing? My house is on foreclosure. Between the mortgage and cra debt I will still owe more than $100,000.00. Not including my loans. The trustee stated I will not qualify for consumer proposal. Please advise.

 

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