Tax debt, consumer proposals and bankruptcy in Canada
Quick summary
If a CRA tax debt is too large to repay, a Licensed Insolvency Trustee can explain whether a consumer proposal or bankruptcy fits. Read ourconsumer proposal guide and confirm the details with a trustee.
Checked November 3, 2026. Main source: Office of the Superintendent of Bankruptcy: Consumer proposals. See all 3 sources.
Please confirm this with a trustee
Income tax debt can often be included in a consumer proposal or bankruptcy. We have not confirmed the exact rules on a primary government page for this guide, and unfiled returns generally need to be filed first. The Bankruptcy and Insolvency Act sets the rules. Speak with a Licensed Insolvency Trustee before you decide.
Why a trustee
- Licensed Insolvency Trustees are regulated.
- A trustee may offer a free first meeting. Ask when you book.
- A trustee can look at all your debts together, not only the CRA debt.
How this links to CRA rules
A proposal or bankruptcy pauses the CRA's 10-year collection clock. VDP is not open for years involved in an insolvency event.
We take no money
We receive no referral fees from trustees, and we link only to the official trustee search.
Questions people ask
Can tax debt be included in a consumer proposal?
Income tax debt can often be included, but confirm with a Licensed Insolvency Trustee. We have not confirmed it on a primary government page.
Is the first meeting with a trustee free?
A trustee may offer a free first meeting. Ask when you book.