What Happens If I Don't Pay My Taxes (MNP 3 Minute Debt Break)

All debt can be overwhelming, but there’s no creditor quite as frightening as the CRA. The bottom line is if you have not filed taxes for several years or your tax debt is severely delinquent, you’re on CRA’s radar. The longer you avoid dealing with the situation, the worse it can get. If you ignore the CRA’s efforts to reach out and arrange a payment plan — CRA will garnish your wages, freeze your bank account, seize assets or worse. 

Wage garnishment is typically one of the first steps CRA will take to recover tax debt from employed individuals. Your employer will receive a Garnishment Order (or Requirement to Pay) which they must abide by, usually requiring them to withhold 30 percent of your wages for remittance to CRA. 

Freezing bank accounts is one of the most effective tools CRA can use to bring you to the bargaining table and convince you to pay your outstanding taxes. CRA may issue an official Requirement to Pay to your bank, which your bank must abide by.

The CRA can also register liens against any personal property you currently own, along with any future acquired assets. CRA can seize equipment, vehicles and even certain investments without court permission or approval. Your property may be at risk too. CRA can register on title to your property — and nothing, save for repaying the debt, will remove them from title. This could force you to sell the property to pay the outstanding taxes. 

It’s one thing to be nonchalant about taxes when you have nothing to lose. But when your property is at risk, the right advice is essential. A qualified professional can advise you on your options, before CRA registers a lien against any property you own.

It’s important to act immediately at the first sign of issues with your unfiled or unpaid taxes and schedule a Free Confidential Consultation with MNP Debt. Together, we can review your situation, discuss your challenges, learn your options and create a plan to tackle your debt — ideally before CRA ever gets involved.

If you qualify, a Bankruptcy or Consumer Proposal can initiate a Stay of Proceedings against any current or future collections action. In most cases, this would lift any account freezes, discontinue any wage garnishments and protect you from future liens or creditors registering on the title of your property. MNP Debt can also identify other solutions and strategies to help reduce the stress and worry of outstanding tax debts and give you much-needed peace of mind.

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