2025-08-14
How to budget for summer vacation
Vacation costs can add up quickly without proper planning. This guide can help you budget so that you can make the most of your trip without overspending.
Owing money to the Canada Revenue Agency (CRA) can feel like an uphill battle. It’s easy to imagine they have unlimited power to collect, leaving you with little room to breathe. While their collection tools are strong, you still have the rights and options to regain control.
Whether your balance comes from personal income taxes, GST/HST, payroll deductions, or other amounts owing, it’s important to understand how the CRA works, what actions it can take, and how you can protect yourself.
The CRA is unlike most creditors because it doesn’t need a court order to collect on unpaid balances. If you don’t pay or make arrangements, they can move quickly to recover debt. Common actions include:
These measures can significantly impact your day-to-day finances and continue until the debt is cleared or a formal arrangement is in place.
If your balance remains unpaid after the due date, the CRA begins charging compound daily interest on the amount owing. Each day, interest is added to your balance, and the next day’s interest is calculated on that new amount. Even a modest debt can grow quickly if left unpaid.
On top of interest, you may face late-filing penalties if you did not submit your tax return on time.
For businesses, missing remittance deadlines for GST/HST or payroll deductions can lead to separate penalties, each calculated on the amount overdue. In certain cases, directors of a corporation can be held personally liable for unpaid source deductions.
There are also indirect costs to consider. If the CRA freezes your account or garnishes wages, you may face overdraft charges, missed bill payments, and damage to your credit history. The disruption can also create stress and uncertainty that affects both your personal life and your ability to plan ahead.
The takeaway is that the sooner you address CRA debt, the more control you have over limiting these costs.
It may not feel like it now, but there are practical steps you can take to deal with CRA debt, even if the amount feels overwhelming. The most important thing is to act before penalties, interest, and collection actions make the situation harder to manage.
The right approach will depend on your circumstances, but these steps can help you start moving in the right direction.
Dealing with CRA debt can be stressful, but you do not have to face it alone. A Licensed Insolvency Trustee can help you understand your options, assess your financial situation, and create a plan that works for you. Even if bankruptcy is not the right choice, they can provide strategies to address the debt and reduce the risk of falling behind again.
If you are carrying a significant balance with the CRA, reach out to a Licensed Insolvency Trustee at MNP Ltd. for a free, confidential consultation. You’ll get guidance on the solutions available to help you resolve the issue and move toward a more stable financial future.
2025-08-14
Vacation costs can add up quickly without proper planning. This guide can help you budget so that you can make the most of your trip without overspending.
2025-08-05
Bankruptcy Consumer Proposal
Losing your job can be frustrating and, even more so, managing your financial wellbeing while you’re unemployed. However, you can successfully navigate the situation with the right budgeting tips.
2025-08-04
Since it’s impossible to predict or prevent most medical conditions or emergencies, the best way to handle them is by planning and preparing for them.