[canambob]

My wife had a sole proprietorship business in Ontario, Canada. She got behind in paying her Ontario Sales Tax remittance and the provincial government attached a lien on our jointly owned house to recover the outstanding moneys owed. This occurred on May 10,2009. She has since declared personal bankruptcy as the business failed on Jan 1, 2011 and is now finished with the bankruptcy process. Our bankruptcy trustee just advised us that the CRA has this lien for $27,000 which is made before the bankruptcy process started. The equity in the house was determined in Jan 2011 to be $17,000 of which my wife gets 1/2 or $8,500 if we sold. Should we contact the CRA and offer $8,500 to remove the lien? What other suggestions do you have to remove the lien? If we sell in say 5 years will the lien still be on our home and if the equity rises to $100,000 will we have to pay the $27K plus interest? We'd like to end this situation but can not afford $27k.
Many thanks

[JudyKayTee]

The lien will "live" until it is paid. I just looked at the Canadian Bankruptcy Law and the lien IN FULL survives the bankruptcy (which you appear to know). You can offer a settlement but I see absolutely no reason for the CRA to take it. The lien is against the whole house, not just your wife's half (that's the danger of jointly-owned property).

If the house sells for less than the lien the balance will be your wife's debt.

This is the same as a jontly-owned bank account. What is yours is hers (and the other way around). The entire account could be seized for the debt of either one of you.

In the event I am misinterpreting the law (I am not in Canada) I would contact an Attorney, but I believe (based on my reading of the law) that I am correct.

[Fr_Chuck]

Agree, they may take a settlement off, but they have no reason to, They can wait till the house sells at some time in the future, and they get their money in full before it sells.