Small Business Debt

Unfortunately, in Alberta there are a number of companies struggling to make ends meet. Cash flow has tightened and the bank’s willingness to offer and extend credit has waned.
 

If you are a director or owner of a company facing serious financial challenges, such as Alberta small business debt, you may want to know what obligations will flow to you personally and how our team can help you through the next steps.

The most common obligations of a company that continue to be the responsibility of the directors if the company fails to pay them:

Unpaid source deduction owing to the Canada Revenue Agency (“CRA”)
Unpaid GST owing to CRA
Unpaid Wages
Company Debts guaranteed by director/owner

We first meet to discuss what challenges your company is facing with Alberta small business debt and discuss alternatives for the corporation and what each alternative means for the directors and their families. Small business owners often feel relieved knowing that the above Alberta small business debts can be included in a personal bankruptcy or a consumer proposal if things are not able to be turned around.

Small business owners often overlook the following factors when contemplating the decision of filing a bankruptcy vs. simply taking no action and walking away from their insolvent corporation/business:

Protection from creditors

A bankruptcy filing creates an automatic stay of proceedings, preventing creditors from suing the company or taking legal action against the company to collect their Alberta small business debt. Should a Calgary small business owner decide to simply “walk away without a bankruptcy” they may end up spending significant time and legal costs defending lawsuits filed against the corporation by the creditors who are still owed money.

Corporate filings/tax returns

Without filing a bankruptcy, a small business owner would still be required to file corporate tax returns, and GST/HST returns, regardless of whether their company is still operating and/or earning income. Small business owners would still have to incur the professional costs of accountants to prepare and file the returns. On the other hand, if a bankruptcy is filed, the Trustee would be responsible for completing all required final returns, alleviating one more burden from the director/owner.

When faced with a bankruptcy or a consumer proposal, there is a lot to consider.

We can assist with a plan to put a stay of proceedings in place and prevent future losses of money and precious time.

Please reach out and let us know that you are interested in becoming debt free. You can do this by calling us at 403-561-8228, texting us at 587-438-9786 or emailing debtfree@recoverfromdebt.ca.

Let's get started, contact The Fryzuk Group, Licensed Insolvency Trustees, now.