Monday, 24 June 2013

How to Get Your Bank Account Unfrozen

Having your bank account frozen is not fun. A frozen bank account will paralyze your ability to pay your bills because essentially money can go in but no money can go out. Depending on who the authority freezing your bank account was, you may or may not have an opportunity to get your account unfrozen and then get some or all of your money back.

Let’s begin by reviewing who can freeze your bank account and how they can do it.

A creditor can freeze your bank account if 1) they sue you; 2) they successfully obtain a judgement against you; and 3) they are approved by the court to take enforcement action against you. The creditor then takes the proof from the court that they have a judgement and can freeze your account and sends it to your bank. Your bank can accept the document and freeze the funds in your account for a period of time. In the Ontario small claims court for example, the bank would hold the funds in your account for 30 days. At the end of the time period the funds are sent to the court. The court then holds the money for an additional period of time and then it is released to the creditor.

In the case of a frozen bank account with respect to a tax debt to the Canada Revenue Agency, the CRA does not need a court order to freeze your bank account. The CRA will send a notice to your bank - this notice is called a ‘Requirement to Pay’. The bank then will freeze your account and again will hold the funds in your account for a period of time. Once the allotted time period has expired the funds will be directed to the CRA.

In the case of a frozen bank account that results from unpaid family responsibility, the court will issue an order that the account can be frozen. The funds will be held for a period of time and then released to either the Family Responsibility Office or the court, which will later release them to the other parent. If your account has been frozen as a result of unpaid family responsibility you will need to speak to a lawyer to see if he or she can go to court on your behalf to request an order to lift the freeze.

If the case of a bank account that is frozen by the CRA or as a result of a small claims court order, you will need to get financial help, and this help will need to come from a financial consultant who is experienced and capable of combatting a frozen bank account under these circumstances. A good financial consultant can qualify you for programs that will stop the enforcement action being taken against you, freeze the interest accumulating on the debt, potentially reduce the size of the debt and allow you to make a monthly payment that you can afford.

If your bank account is frozen and you need help call DebtCare at 888-890-0888 or visit

Monday, 17 June 2013

Canada Revenue Agency Got You Down? Here Are Some Tips for Dealing with the Tax Man

Owing money to the Canada Revenue Agency is by far one of the scariest financial challenges that many Canadian taxpayers face. The Canada Revenue Agency is not an average creditor because they are part of the federal government. They have significant authority with respect to enforcing tax compliance and collecting tax debts.

This authority includes (without a court order or notice to you):
1.      Pursuing criminal charges under the Income Tax Act
2.      Imposing penalties
3.      Imposing interest
4.      Notionally assessing your income even when you don’t file a return
5.      Garnishing your wages
6.      Freezing your bank account
7.      Placing a lien on your home
8.      Placing a lien on other property
9.      Garnishing your company’s receivables, and more….

The Canada Revenue Agency can be ruthless. If you have a tax debt that you can pay, you must be very careful. The Canada Revenue Agency may seem amiable and willing to make a payment plan with you. They will send you a request for financial disclosure. On the financial disclosure you will have to tell them where you live, where you work, provide all sources of income, provide all assets, banking information and more... You may complete this form being open and honest indicating all of your liabilities and payment and then based on what cash flow is left, promise a payment plan.

Once the Canada Revenue Agency receives your financial disclosure they will know all of your assets, where you bank, where you work – you will be completely exposed. Also, when the CRA reviews your budget and sees payments to other creditors like loans and credit cards, they will exclude them from the budget and ask you for significantly more in terms of a monthly payment than you are comfortable with.

This will leave you in the worst position – Who do you pay? What about your credit? What about your family? What about your job? This is how the human aspect of having a tax debt can be sometimes even more impactful than the financial consequences. Many taxpayers suffer with medical problems that stem from stress associated with an inability to pay a tax debt.

Listen, you cannot draw blood from a stone and there are many reasons why Canadian taxpayers find themselves unintentionally in trouble with the Canada Revenue Agency. A good financial consultant can guide you through programs that are available that can stop CRA collections and help you deal with your tax debt. Attempting to negotiate directly with the CRA will often lead to increased exposure so the best thing you can do if you have a tax debt you can't pay is seek professional help.

If you need help with a Canada Revenue Agency tax debt contact DebtCare Canada online or call 888-890-0888.

Monday, 10 June 2013

What is R9 Credit and How Can I Get Rid of It?

Many individuals who have an R9 on their credit report will often reference their credit as ‘R9 credit’, as though R9 is the credit rating.

Credit reports have an over-all rating. This is a number between 300 and 900. This rating is calculated based on everything that is listed on your credit report. 300 represents a poor rating and 900 represents the best rating. When you request your credit report this “score” is called a FICO score. When a lender requests your credit report they see the same score – this is called the “Beacon score”. A Beacon score and a FICO score are the same thing. R9 credit is not your overall credit score, although it will reduce it.

What is R9 credit? The letter R stands for revolving and the 9 represents a “bad debt write off” so an R9 credit score is a credit card, line of credit, store card or some other form of revolving credit that has gone into default. If you do not make a payment on a revolving credit product for 6 months your individual rating for that credit product will become an R9.

An R9 will remain on your credit report for 7 years from the date of last activity (this is the last date that you made a payment on the credit). Many people think that somehow R9 credit magically disappears after 7 years but it is important to note that it is 7 years from the date of last activity and it won't necessarily go away on its own. This is a very common credit report error that many people end up spending many months to resolve.

R9 credit can be resolved in one of a few ways:

1.       You can pay the debt in full – the R9 credit should be removed 7 years from the date the debt has been paid in full.

2.       You can make a settlement on the debt with your creditor(s) – the R9 credit should be removed from your credit 7 years from the date it is reported as settled.

a.       Settlements must be documented, including proof of settlement being accepted by your creditor and proof of payment.

b.      Equifax must be independently notified of the settlement.

c.       You must follow up to ensure that the settlement has been reported to your credit report.

3.       If you go to credit counselling, the R9 credit will turn into an R7 credit and the R7 will be removed from your credit report 3 years from the date the credit counselling plan is paid in full.

4.       If you file a consumer proposal the R9 credit will be removed from your credit 6 years from the date it is paid in full – make sure when you file a consumer proposal that you independently send proof of the consumer proposal to Equifax.

5.       A bankruptcy – the R9 credit will be removed from your credit 6 years from the date the bankruptcy is discharged – make sure when you file a bankruptcy that you independently send proof of the bankruptcy to Equifax.

6.       R9 credit can also be removed 7 years from the date of last activity if that was the last time a payment was made on the credit product. This is in no way a slam dunk – often creditors will continue to report activity to the credit report even after there hasn’t been any. Also, if the account is purchased by a collection agency, this can become extremely complex.

Having R9 credit on your credit report is not great – but it isn’t the end of the world either. There are ways to not only work to have the R9 removed but also to correct any other bad credit to help rebuild your credit score. Speaking with a financial consultant skilled in dealing with R9 credit is a smart practice.

If you have R9 credit and need help please contact DebtCare by calling 1-888-890-0888 or visit


Monday, 3 June 2013

How to Deal with Credit Report Errors

Thousands of Canadians have credit report errors on their credit reports – the scary part is many of them don’t even know it.

Credit report errors most commonly occur when your creditors don’t accurately report information to your credit report. The reason credit report errors are so common is because the data is reported electronically by your creditor to your credit report.

You may be getting declined for credit or quoted higher interest rates on credit because of credit report errors and new lenders you apply to for credit are not allowed to tell you what's on your credit, so it won't be pointed out to you.

The most common types of credit report errors are payments and settlements that have not been reported. The only way to avoid credit report errors is to know what's being reported to your credit report. The first step you have to take if you want to avoid credit report errors is to request your credit report from both Equifax and TransUnion.

Credit report errors can be extremely difficult to get resolved because Equifax will require evidence from you to support that there is an error and if you don’t have it or they won’t accept what you provide you then have to rely on your creditor to report the correct information. Creditors can take months to do so, if they do so at all.

The only way to get credit report errors corrected quickly is to know your rights and to dedicate the time needed to accomplish the task.

1.      The Ministry of Consumer Services is the ministry responsible for the Consumer Reporting Act which is the legislation that consumer reporting agencies like Equifax and TransUnion, as well as your creditors, must follow when reporting your personal information.

2.      Any communication concerning corrections that are needed should be sent in writing and should be sent by registered mail.

3.      You must know the timelines in which you should expect credit report errors to be updated, make sure that you request your credit report to ensure that they have been made and if they have not follow up again in writing.

Failing to ensure that there are no errors reporting to your credit report can have serious consequences. Not just because you may not be able to obtain the credit you need but also because you will most certainly pay higher interest rates on credit products if lenders view the credit report errors as derogatory which could cost you thousands of dollars or more.

If you are thinking right now that you don’t have the time, energy or know-how to take on your credit report errors on your own – you are not alone. Many who advertise ‘fix your credit’ programs are actually companies looking to see you deal with credit problems through a bankruptcy or credit counselling. We take the position that credit errors are credit errors – not bad credit - even bad credit can be addressed using various financial strategies that do not involve bankruptcy. Following the Consumer Reporting Act and leveraging our in-house legal counsel, we fight Equifax, fight your creditors and get your credit fixed.

If you need to fix credit report errors on your credit report, contact DebtCare Canada today by calling 888-890-0888.