I met with Joe (I have left out some details for confidentiality reasons and Joe is not his real name). Joe is a roofer and works as a subcontractor for a larger company. He is paid by cheque for the time he works. There are no deductions for income tax or CPP. As a subcontractor he is personally response for the income tax and CPP on his self-employment earnings.
Joe's expertise was roofing - accounting is not something he was very good at. His income varied by month due to the weather and demand for his services. His income tended to be higher during the summer and lower (or none at all) during the winter months.
After three years of roofing, a CRA auditor contacted him. Joe had not filed his taxes during this time. Further, CRA assessed him for GST on his income as he had received in excess of $30,000 annually. To top it off, Joe was charged penalties and interest on all of these items.
The debts that Joe owes to CRA topped $40,000. Joe currently did not have the ability to pay this debt. Joe called Hoyes, Michalos & Associate Inc. in Kitchener, Ontario to review his options.
With meeting with Joe, we reviewed the options of dealing with CRA for payments, finding a bank loan, filing a consumer proposal, or to file personal bankruptcy. We considered Joe's future plans and goals to help him decide on a path that will deal with his past debts and allow him to have a future that he would like. Joe filed an assignment in personal bankruptcy that dealt with his past debts and gave him a fresh start. Joe now does his bookkeeping month and makes regular instalments for future taxes to prevent future tax debts.
At Hoyes, Michalos in Kitchener, Ontario, we assist many individuals work on a plan for the future and deal with their past debts. We understand that a financial strain can be a very stressful experience, so we encourage you to e-mail us a question or give our Kitchener office a call at 747-0660 or 310-PLAN to arrange a free meeting to discuss your situation in more detail.
posted by Scott Schaefer, CA @ 1:36 PM
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