Can’t Pay Your Taxes? There Are Solutions
Sometimes life doesn’t turn out the way we expected and we find ourselves overwhelmed with debt.
Carrying any kind of debt can feel like a burden. And if you happen to owe money to the Canada Revenue Agency (CRA), it’s not a problem that will go away if you ignore it. You may be able to fly under the radar for a little while, but the CRA will catch up to you and seek repayment eventually. They will use a variety of collection remedies such as freezing bank accounts, garnishing wages, garnishing pensions and registering liens.
Tax Debt Relief Options
If you cannot pay your tax debt, the CRA may be willing to accommodate your situation. You may qualify for a payment arrangement — an agreement you make with the CRA — or ask for taxpayer relief. A payment arrangement would allow you to make payments over time until you have paid your entire debt, including applicable interest. To draw up a payment arrangement, the CRA will usually ask for proof of income, expenses, assets and liabilities. If you miss a payment or have unfiled tax returns, the CRA will often cancel the payment arrangement and take action to recover your debt.
An LIT Can Help You Set Up a Consumer Proposal
If the terms required by the CRA are unsustainable and you cannot make your payments, this may be a good time to speak to a Licensed Insolvency Trustee (LIT).
An LIT can help you draw up a Consumer Proposal
Consumer Proposal to deal with creditors, including the CRA. A Consumer Proposal can provide you with a fixed monthly payment that works within your budget and settles your indebtedness to most unsecured creditors. If the CRA accepts it, the CRA’s interest and penalties will no longer accrue and you can be debt-free in as little as five years.
The main difference between a payment arrangement with the CRA and a Consumer Proposal is the Consumer Proposal’s ability to affect a person’s debt to the CRA and stop the accrual of interest charges. The CRA recognizes the authority of filing a Consumer Proposal under the Bankruptcy and Insolvency Act and the inability of the debtor to repay their indebtedness. If a Consumer Proposal is accepted, the CRA will have no choice but to write off the debt.
In certain years, it has been reported that CRA has written off more than $2.5 billion in tax debt. Most CRA agents are sympathetic and recognize that difficult things sometimes happen in life. However, sympathy does not provide a legal basis for a CRA agent to agree to a write-off. Filing a Consumer Proposal will. Don’t hide — seek the advice of an LIT and be on your way to a debt-free life.
Call for Your Free Confidential Consultation
The sooner this process can begin, the more options that are available — and it all begins with a Free Confidential Consultation with an LIT. You’ll learn about Life-Changing Debt Solutions, such as a Consumer Proposal. A Licensed Insolvency Trustee will identify debt-reduction strategies you may benefit from and offer a detailed explanation of every option, providing the information and perspective you need to make the right choice for your unique situation.
