> ## Content Index > Fetch the complete content index at: https://blog.knack4business.com/llms.txt > Use this file to discover other available public pages before exploring further. # CRA Tax Debt: Why Your Business Is At Risk (And How To Stop It) - URL: https://blog.knack4business.com/cra-tax-debt-why-your-business-is-at-risk-and-how-to-stop-it/ - Published: 2026-09-10T18:00:18.000Z - Updated: 2026-09-10T18:00:17.000Z - Description: Michael Yasny of Money Consultants breaks down what Canadian business owners need to know about CRA tax debt ~ before and after the call comes. - Author: Bernie Franzgrote - Tags: Leadership & Ops, finance, CRA, tax debt, source deductions, HST, Canadian SMB, alternative financing, business debt, payment plans, Michael Yasny, Money Consultants, garnishment, director liability, Knack 4 Business Host: Bernie Franzgrote Michael Yasny of Money Consultants explains how Canadian SMBs can survive CRA tax debt — payment plans, garnishments, source deductions, and what never to do. ### **GROWTH CATEGORY:** Leadership & Ops --- **Brought to you by** [Gentry Learning](https://tinyurl.com/mr2fufae?ref=blog.knack4business.com), [Profit10™](https://tinyurl.com/58she8w6?ref=blog.knack4business.com), and [Canada Growth Network](https://tinyurl.com/3s5d3ayv?ref=blog.knack4business.com). --- ![](https://storage.ghost.io/c/c2/71/c271bbbd-7656-42a5-bca8-28e3520864c6/content/images/2026/08/GENTRY-LEARNING-trnsprnt-LOGO-2-1.png) #### [Gentry Learning](https://tinyurl.com/mr2fufae?ref=blog.knack4business.com) Real estate education built for people who want to build real wealth, with Fred Crouch. [Gentry Learning - FREE NEWS LETTER](https://tinyurl.com/mr2fufae?ref=blog.knack4business.com) --- Your remittance is late. Then it's really late. Then CRA calls — and you feel your stomach drop. Michael Yasny has been in that room with business owners for over 30 years. He's the founder of [Money Consultants](https://www.moneyconsultants.ca/?ref=blog.knack4business.com), a Toronto-based alternative financing firm. He works with startups, growing businesses, and companies in financial trouble — arranging everything from factoring and purchase order financing to CRA debt restructuring. He's the calm voice in the room when the numbers get messy. In this episode of Knack 4 Business, Michael breaks down what to do when CRA comes calling — and the moves that make everything worse. --- ### Watch the full conversation here --- ### **ANSWER CAPSULE:** CRA tax debt builds quietly — missed remittances compound into garnishments before most business owners realize the danger. Michael Yasny, founder of Money Consultants with over 30 years in alternative financing, explains how Canadian SMBs can negotiate workable payment plans, protect personal assets, and avoid the mistakes that cost businesses everything. --- ### **WHO THIS IS FOR** Canadian SMB owners / Startups / Solopreneurs / Any business owner carrying CRA arrears or wanting to understand their options before trouble starts. --- ### **Key Lessons** **1\. The quiet slide is the real danger.** CRA doesn't operate like a supplier. A supplier stops delivering if you're 30 days late. CRA may not contact you for a year or more. By then, a manageable problem has become a serious one. Michael estimates that 80–90% of CRA debt owed by businesses is a direct result of this slow-response gap. The debt builds because nobody called soon enough — on either side. The habit that protects you: file every month, even if you can't send the money. Penalties are far more expensive than interest. One client Michael described owed $183 in interest — and $700 in penalties. Filing on time eliminates the penalties entirely. **2\. Source deductions come before everything else.** If you have one dollar and two CRA debts — source deductions and HST — send it to source. Every time. No exceptions. Source deductions are payroll funds you withheld from employees: income tax, CPP, employment insurance. HST is money you collected on behalf of the government from your clients. Both are trust funds. But source carries much harsher personal liability — a trustee has far more room to work with HST debt than with source. Prioritize source. Write it on every payment. If you don't label it clearly as arrears, CRA will apply it to current obligations and put you in default on your arrear payments. **3\. A negotiated payment plan beats a panicked payment — every time.** CRA will tell you to borrow from the bank, go to family, or mortgage your home. These are not legal demands. You can say no. And in most cases, you should. Michael shared the story of a client who mortgaged his house for $400,000 to pay down a $1,000,000 CRA debt — against Michael's direct advice. CRA took the payment and came back for the remaining $600,000 the next day. The business had no money left to operate. It failed. The client went personally bankrupt. A structured payment plan — one the business can actually sustain — is almost always the better path. Michael negotiates these directly with CRA agents, building arrangements that account for cash flow, graduated payments, and the business's ability to stay current while paying arrears. --- ### **Practical Steps** **1\. Pick up the phone — and call back fast.** When CRA contacts you, call back before you call anyone else. Showing up to the conversation signals good faith. Hiding triggers escalation — and garnishments follow. A garnished bank account means you can't pay employees, suppliers, or anyone. It can shut a business down in days. **2\. File even when you can't pay.** You don't have to send the money to avoid the worst of it. File on time and you avoid penalties — which are often three to four times larger than the interest. File late and you owe both. This is one of the highest-leverage habits for any Canadian business owner carrying arrears. **3\. Get someone in your corner who knows what CRA can actually demand.** Your accountant knows tax. They don't necessarily know what CRA can legally require in a collections conversation — and what they're just saying to apply pressure. An experienced advisor like Michael negotiates the payment structure, holds the line on terms, and stays with you for the entire repayment period — not just the first call. --- ### **About the Guest** Michael Yasny is the founder of [Money Consultants](https://www.moneyconsultants.ca/?ref=blog.knack4business.com), a Toronto-based alternative financing firm he has been building for over 30 years. He helps startups, growing companies, and businesses in financial trouble find financing when the bank says no — from purchase order financing and factoring to debt restructuring, private mortgages, and CRA debt solutions. He is also the author of [*Am I Out of My Mind?*](https://www.amazon.com/stores/Michael-Yasny/author/B0BMS2M4YR?ref=blog.knack4business.com), a practical guide to starting a business. Connect with Michael on [LinkedIn](https://www.linkedin.com/in/michael-yasny-85156767/?ref=blog.knack4business.com) or [Instagram](https://www.instagram.com/michael.yasny/?ref=blog.knack4business.com). A free 30-minute consultation is available at [moneyconsultants.ca](https://www.moneyconsultants.ca/?ref=blog.knack4business.com). --- ### **Listen on Audio** [Listen on Simplecast](https://tinyurl.com/2fp574tf?ref=blog.knack4business.com) [Browse all episodes](https://tinyurl.com/y8tctv4v?ref=blog.knack4business.com) --- ### **Partners on this episode** [Gentry Learning](https://tinyurl.com/mr2fufae?ref=blog.knack4business.com) — Real estate education built for people who want to build real wealth, with Fred Crouch. [Profit10™](https://tinyurl.com/58she8w6?ref=blog.knack4business.com) — Take the free Profit Snapshot. Ten questions. Find out what's really holding your business back. [Canada Growth Network](https://tinyurl.com/3s5d3ayv?ref=blog.knack4business.com) — Business community plus full CRM and automation suite. Real tools. Real people. $47 CAD/month. --- ### **FAQ** **Q: What happens if I just ignore CRA when they call?** A: CRA escalates quickly when you go quiet. The most common next step is a garnishment on your bank account — which freezes your ability to pay employees, suppliers, or anyone else. It can happen faster than most business owners expect, and it's hard to reverse once it's in place. The single best move is to call back as soon as possible. **Q: Can I negotiate a payment plan directly with CRA myself?** A: You can try. But CRA agents have standard demands — and until you know what those demands actually mean versus what you're legally required to do, the conversation can go sideways fast. An experienced advisor knows what CRA can genuinely require and what is pressure. That distinction can save your business. **Q: If I close my company, does the CRA debt disappear?** A: No. Director liability means the debt follows you personally. CRA can place a lien on your personal property — including your home — and the debt remains until it's paid or resolved through a formal trustee process. Bankrupting the company is not a clean exit from CRA arrears. --- ****Next Steps to Take** - [Join Canada Growth Network](https://tinyurl.com/3s5d3ayv?ref=blog.knack4business.com) — $47 CDN — community plus a robust CRM - [Web Indexer](https://tinyurl.com/yav4edf5?ref=blog.knack4business.com) — Quick install chatbot. Info 24/7 for visitors - [Browse all episodes — K4B / ETW / CGN](https://tinyurl.com/y8tctv4v?ref=blog.knack4business.com) - [Search K4B episodes by topic](https://tinyurl.com/43fdyzew?ref=blog.knack4business.com) — the Web Indexer powers this - [Want to be a guest? Register here](https://tinyurl.com/43fdyzew?ref=blog.knack4business.com) [Join Canada Growth Network ](https://tinyurl.com/3s5d3ayv?ref=blog.knack4business.com) --- ### **K4B Acknowledgements** - [Carl Richards](https://www.linkedin.com/in/carl-richards-3a0a223/?ref=blog.knack4business.com) - [Fred Crouch](https://tinyurl.com/3psh5bdk?ref=blog.knack4business.com) - [Jovan Strika — @Hive](https://tinyurl.com/4dmcxah8?ref=blog.knack4business.com) - [Melanie Webber](https://www.linkedin.com/in/melanie-webber-879806128/?ref=blog.knack4business.com)