Monday, 22 April 2013

3 Reasons Why You Should Not Try to Negotiate with the CRA Directly

Thousands of Canadians struggle with tax problems. One of the worst things that you can do if you have a tax problem that has or will result in a debt that you can’t pay is to try to negotiate with the CRA directly. The reason for this is because the CRA has a single mandate and that is to close your file, whether the money is successfully collected from you or not.

It may sound like it doesn’t make sense, but in fact it does. When a taxpayer is behind filing tax returns or has a large tax debt, the CRA’s success is actually benchmarked by files closed and not dollars collected. This means that, as time goes on, interest and penalties accumulate and by the time you file late returns or decide to try to pay your tax debt, bam – your tax debt may have doubled or even tripled in size.

How does the CRA close files? By coming after you! Leveraging tactics like wage garnishments, sending garnishments to your clients (in the case of self-employed people and contractors), freezing your bank account, placing liens on your property and more… Sometimes one tactic will be deployed or multiples will be deployed all at once. Doing this forces you to do one of two things – pay the debt or go bankrupt or file a consumer proposal – all three result in your file being closed.

This is why negotiating directly with the CRA can be dangerous. The average person doesn’t know what the CRA is capable of, so in good faith will try to negotiate, resulting in more personal exposure.

The CRA will play good cop, bad cop – having one agent go after you and then another swooping in and being nice, delicately extracting your personal information to be used against you at a later date. The CRA may accept a temporary payment plan or suspend an enforcement measure “if” you complete a financial disclosure form that includes telling them any assets that you own, where you work and where you bank.

While the CRA has methods to find out your personal information, why serve it up to them on a silver platter, making it that much quicker and easier for them to come after you?

At the end of the day, if you have a tax debt that you cannot pay you have a financial problem. A financial problem can be resolved through a consultation with a financial consultant who routinely deals with CRA matters. Don’t go it alone – good help is out there.

If you have a tax debt and you need help please call DebtCare Canada at 888-890-0888 or visit


Friday, 19 April 2013

Is the Big Bad Wolf Calling?

This funny little video created by DebtCare highlights how Canadians with financial problems feel when trying to deal with creditors and collection agencies. DebtCare Canada helps people who want to stop collection calls and get out of debt. To find out more visit or call 1-888-890-0888.

Wednesday, 17 April 2013

What to Do if Your Wages Are Being Garnished

If your wages are being garnished then no doubt you are feeling the pain. Having your wages garnished results in severe financial problems and even embarrassment at work. There are different types of wage garnishments that have financial impacts.

If your wages are being garnished as a result of family responsibility there is little that you can do outside of working with a lawyer to try to get the amount of the wage garnishment reduced or to work towards paying up your arrears and then moving to a voluntary monthly payment plan. There isn’t really any protection for individuals who have unpaid child support. Child support wage garnishments can consume up to 50% of your income.

If your wages are being garnished as a result of a judgement in small claims court you do have some options. You can make a motion to the local small claims court and ask a judge to reduce the amount of the wage garnishment or to lift it and allow for an agreed-upon voluntary monthly payment. While this can be effective, the courts do have the final say, and can say no. It also depends on your creditor. You can also look at working with a financial consultant to make a proposal to your creditor so that they agree to lift the judgement. This can be quite effective and even result in the interest that is accumulating on your debt being frozen. A garnishment imposed through the small claims court can consume up to 20% of your wages in most Canadian provinces.

If your wages are being garnished by the Canada Revenue Agency (CRA) this is by far the most dangerous type of garnishment. A CRA garnishment can consume up to 50% of employment income and up to 100% of secondary income. For example, if you are a contractor the CRA can demand that your client send 100% of your earnings. This is the most dangerous type of garnishment because a CRA imposed garnishment can literally make it impossible to pay for the necessities of life, such as food, transportation and shelter. Those who are self-employed may lose business or have clients simply walk away because dealing with the garnishment is just too much hassle.

Like judgements issued through small claims court, a good financial consultant can also help you to combat a CRA garnishment. There are programs and protections available that can stop a garnishment (even one issued by the CRA), freeze interest and even reduce the amount of the debt.

Do not continue suffering in silence. If a wage garnishment is holding you back, help is only a phone call away. For more information please call DebtCare Canada at 888-890-0888 or visit

Monday, 8 April 2013

Why an Ontario Trustee in Bankruptcy May Not be the Best Choice

Traditionally when people think of an Ontario trustee in bankruptcy they think of bankruptcy. The fact is that the Ontario trustee in bankruptcy has changed in recent years. In the past, if you had severe financial problems, you may have thought that bankruptcy was the only way out and so you would seek out an Ontario trustee in bankruptcy.

So what has changed? In recent years, the bankruptcy laws have changed making it more difficult to file for bankruptcy and making consumer proposals a much more attractive option for people who struggle with debt. Also, Ontario trustees in bankruptcy have begun advertising much more aggressively. If you don’t know what an Ontario trustee in bankruptcy is then you may misunderstand this advertising and think that when you are calling you are going to have some other financial options. However, generally speaking, the only two programs that bankruptcy trustees offer are bankruptcies and consumer proposals.

So what’s the big deal if you end up at an Ontario bankruptcy trustee’s office? Maybe a consumer proposal or bankruptcy was what you had in mind anyway. Going to an Ontario bankruptcy trustee may in fact be a big deal because if you buy into the debt solutions offered, a trustee does not in fact represent you and you alone through the process.

An Ontario bankruptcy trustee has a responsibility to represent both you and your creditors. This means that if you want to file a bankruptcy or consumer proposal it is the trustee’s job to ensure that your creditors get a fair deal and that they are able to get as much money out of you as possible. Here is a really great example:

1.Suzy goes to an Ontario trustee in bankruptcy and decides that bankruptcy is the only option for her. The Ontario trustee in bankruptcy asks Suzy to complete a long document where she has to provide detailed financial information.

2. Suzy owns a home that she bought 5 years ago for $300,000 and assumes that it is worth about the same amount of money, so she indicates on the form that the home’s value is $300,000.

3.The Ontario bankruptcy trustee allows her to file for bankruptcy based on the financial disclosure that Suzy has made.

4.Based on this approval, Suzy is told what her monthly payment will be over a prescribed time period.

5. The Ontario trustee in bankruptcy has a team inside his or her firm which reviews the bankrupt’s assets, and without provocation from creditors, the Ontario trustee in bankruptcy later deems that Suzy’s house is worth $400,000, not $300,000.

6. The Ontario trustee in bankruptcy writes to Suzy and advises her that she owes thousands of dollars in surplus income that will have to be paid to her creditors or else the Ontario trustee in bankruptcy will oppose her discharge.

Can you imagine how you would feel if this happened to you? Filing for bankruptcy or filing a consumer proposal unrepresented is much like being accused of a crime and defending yourself without representation. If you were being charged with a crime it would not be wise to go to court without a lawyer. Where an Ontario trustee in bankruptcy is concerned, it may not be a good choice to go to them directly without seeking independent financial advice. Instead, visit a financial consultant 1) to ensure that you have explored all of your financial options; 2) to ensure that you make complete disclosure and to determine your personal exposure so that nothing comes up later; and 3) to ensure that the best possible deal is negotiated with the Ontario trustee in bankruptcy.

If you have a financial problem and need help, please contact DebtCare Canada at 888-890-0888 or visit

Tuesday, 2 April 2013

Get Out of Debt Canada!

Even though the economy seems to be rebounding, the average Canadian household debt load continues to grow. People across the country are still relying heavily on credit for a great number of their normal purchases, and many are finding it harder and harder to pull themselves out of this dangerous cycle.

The stats on Canadian debt are unprecedented. A recent report from the CBC stated that the average unsecured consumer debt load jumped 4.6 percent in the third quarter of 2012 – the average amount being $26,768. The debt to income ratio has jumped from 140 to 165 percent. For Canadians, the trend seems to be one of continued reliance on credit to the extent that many are opting to up limits and increase borrowing.

This trend is becoming more and more problematic for those Canadians unable to meet minimum monthly payments. If monthly financial responsibilities exceed income, the results can be disastrous. This is why it has become increasingly important to get out of debt and take back control of your finances.

An important thing to remember when you are thinking about how to get out of debt is that you don’t have to do it by yourself. The influx of companies offering debt reduction services is evidence of this. Many Canadians are turning to these companies to get out of debt. It is important though, even with new regulations being put in place, to make sure that the company you choose is one that has your best interests in mind.

A good financial consultant is a great option for a number of reasons. An experienced, well-reputed financial consulting company can offer you solutions to get out of debt the right way. By offering you budgeting advice alongside various methods to get out of debt, a debt reduction company can give you the help that you need to get rid of your debt.

Many Canadians worry that bankruptcy is the only option when drowning in debt – it isn’t. Instead, debt consolidation is a great solution for many Canadians, as is entering into a consumer proposal. Consolidating your various monthly payments into one, easily managed payment not only makes it easier to pay, but this can also reduce the interest. A consumer proposal, if accepted, can reduce your debt substantially, making it far easier to get out of debt much more quickly.

Don’t keep ignoring your financial problems to the point that they take over your life. Instead, talk to a good financial consultant who can present the options available to help you get out of debt – before it is too late.

It is time to get out of debt Canada. For more information about how to deal with your debt, please contact DebtCare Canada today by calling 888-890-0888 or visit