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Legal Ease
Legal Ease, Lawyer
Category: Canada Tax
Satisfied Customers: 101416
Experience:  Lawyer
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My husband is a self-employed cable technician, sole

Customer Question

My husband is a self-employed cable technician, sole proprietor of an Inc company, sub-contracting for a large cable company. He owes approx $45,000.00 in TPS/TVQ taxes to the Quebec (Prov) & Canada (Fed) govt's.
He is considering declaring bankruptcy. He earns about $65,000.00/year and I am on disability benefits. ($11,000.00/year). I have Parkinson's Disease and in 2013 was hospitalized for 8 weeks with pancreatitis which lead to a diagnosis of Type 2 diabetes. I racked up $25,000.00 of credit card debt because of the side -effects of one type of medicine I was taking. So we took a home equity loan and as part of the loan condition, I had to transfer/sell my half of the house to my husband for $1.00.He still is the sole owner of the house. Can my husband transfer/sell the house
back to me? If he would file for bankruptcy, would it be personal or corporate & what is the difference between them. Can the gov't seize the house? What are our options?
Submitted: 1 year ago.
Category: Canada Tax
Expert:  Legal Ease replied 1 year ago.

The plan will not work.

First declaring bankruptcy does not affect the $45,000 at all. This is a special debt. Your husband is considered to be the trustee for money he is holding in trust for the government. In other words he collected it for them. Bankruptcy has no relevance in that case and the debt will remain.

Yes the government will seize the house if the money cannot be paid off another way.

Your husband cannot transfer the title to you to defeat creditors. That would be fraud and this fraudulent conveyance will be set aside.

Neither personal or corporate bankruptcy will help in this case. He owes the money personally as the director of the corporation.

I suggest that your husband sit down with a lawyer to get a better understanding of the law.

I am sorry this is not what you were hoping to hear and for your terribly difficult situation.