Tuesday, 25 March 2014

Tax Deadline – Have a Plan if You Cannot Pay Before the CRA Knows It

The tax deadline is fast approaching – the deadline to file your 2013 return, as always, is April 30th – are you ready? Getting your returns in order and filing on time can sometimes be an annual hassle, but it can’t be avoided. Filing online is growing in popularity, and can be done from the comfort of your own home. But what if you miss the deadline – what are the consequences of this?
If filing taxes seems like a hassle, then dealing with the consequences of missing the tax deadline can seem like a nightmare, especially if you owe. Missing the deadline when you are owed money just means waiting longer to receive it (why would anyone want to do that?), but when you owe money, the Canada Revenue Agency (CRA) won’t wait – and that tax debt will just continue to grow the longer you wait to pay it.
What are we talking about here? When you owe a tax debt, interest and penalties accumulate at an alarming rate, to the tune of 5% of the total tax debt plus 1% monthly for up to 12 months. Additionally, if you filed late in previous years, your penalty can increase to 10% of the total tax debt plus 2% monthly for up to 20 months. These additional charges are significant, and left unpaid can grow to become larger than the total debt you originally owed.
Interest and penalties are not the only things that contribute to your tax debt becoming seriously problematic. Once the CRA knows that you owe, they can get pretty aggressive in their attempts to gather the money. Good cop, bad cop tactics to obtain your personal information, collection calls, and enforcement action (wage garnishments, frozen bank accounts) are all realistic and costly outcomes of a missed deadline and failure to pay.
So, knowing all of this, how can you avoid the irksome effects? If you know that you are going to end up owing money to the CRA it is a smart idea to have a plan in place before they learn about it. Firstly, if you have the ability to pay the debt in full upon filing, great – do that. This will solve the problem before it starts and leave you in a fresh financial position tax-wise. However, if you don’t think you can pay the debt in full, getting a plan in place to do so is a very smart idea.
For more information about avoiding the consequences of a missed tax deadline please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca  

Monday, 17 March 2014

Realistic Debt Solutions – What Are Your Options?

Being in debt can be a drag – but there are options available. However, before making any decisions about which route to take it is always a good idea to understand what each of the various debt solutions entails. Check out our chart to find out the main differences between the 4 most popular debt solutions out there.

For more information about any of these debt solutions or to get a plan started please contact DebtCare Canada by calling 1 (888) 890-0888.

Tuesday, 11 March 2014

What to Do When CRA Collections Get Aggressive

Tax time is just around the corner, and for many Canadians this is just another item on the to-do list that takes a bit of time. For others however, tax time can be incredibly stressful, especially if you owe, or are going to owe, money. Once the Canada Revenue Agency (CRA) finds out about this debt, collection agents can get pretty aggressive – so how can you deal with this? Here are some tips on how to protect yourself when CRA collections come calling.
Firstly, if a debt is owed to the CRA, and you have the ability to do so, pay it off completely. Once you are paid up, collection calls will cease and you will no longer have to worry about it.
However, if you are not in a financial position to pay off the debt, other arrangements will be required. In this case, the CRA will often start out with a friendly call in an attempt to obtain your personal information and to create a monthly payment plan. At the beginning this may not seem too bad, but keep in mind this can end up hurting you in the end. As a result of your giving information freely, the CRA now has the ability to commence enforcement action (freeze your bank account, etc.) when you cannot meet their strict and unmanageable payment requirements (the CRA will not accept extended payment plans and interest continues to accumulate).
If you refuse to give your personal information freely, this is when the situation can turn very ugly, very quickly. That ‘friendly’ CRA agent likely won’t seem so friendly anymore, and when collection calls begin it can be difficult to get them to stop. At this point, since a debt is owed, the CRA may initiate enforcement action, including garnishing your wages or placing a lien on your property.
Negotiating directly with the CRA is not the best idea. However, paying the debt is – and therefore that should be your very first consideration. Certain avenues exist that may help you to rid yourself of those troublesome and concerning collection calls. Depending on the size of your tax debt, some of the options available may include a consumer proposal or debt consolidation. 
As mentioned, if you have the ability to pay a tax debt completely, do so. This will end up saving you not only interest, but the stress that accompanies this type of financial problem.
For more information about how to deal with CRA collections, please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca

Tuesday, 4 March 2014

March Break Madness – Don’t Rack Up That Credit Card Debt

Hey parents: March Break is right around the corner, and for many Canadians with kids this can mean a week filled with activity and outings. And these outings can often become huge expenditures. When you are already in credit card debt up to your eyeballs, these costs are all that much more troublesome. This year, skip the costly jaunts and daytrips and opt for something a little less expensive.
Simple Saving Tip #1: Get crafty at home. If you are creative, this can be a great way to not only save a buck but also to get in some much needed family time. Check out websites for crafty ideas to keep the kids occupied (ones that involve things around the house rather than things your need to go out and buy).
Simple Saving Tip #2: Check out free community events. Many communities plan and organize events for school-aged kids over the March break, so why not take advantage of them. Better yet, get together with a few other parents and organize a pick up and drop off schedule so that one parent doesn’t have to do everything and the kids can participate in a group. Libraries and arenas are often a safe bet.
Simple Saving Tip #3: Skip the trip down south and opt for a day at an indoor waterpark. Pack up the kids and their swimsuits and head to the ‘beach.’ Even more savings can be had if you bring a picnic lunch, rather than shelling out major dough on fast food. Sure, you’ll be basking in the glow of artificial sunlight, but your wallet and the credit cards inside will thank you!
Simple Saving Tip #4: Plan a movie or game day. Sure, vegging out on the couch may not be something you want to drill into your children’s heads, but the odd movie date never really hurt anyone. Pop your own popcorn or bake some cookies together for snacks and sit down on the couch to enjoy a flick. Or grab those dusty board games from the top shelf and get a little healthy competition flowing.
Simple Saving Tip #5: Get some fresh air. Check out local hills and grab a toboggan for some fun in the snow. Take the family dog for a long hike through the forest. Take out the skates and head to the local outdoor rink. Bonus: exercise will make you feel better too!
Just because it is March Break doesn’t mean you need to rack up that credit card debt. Use these simple money saving methods to keep kids entertained without breaking the bank.
For more information about credit card debt, how to stop it from accumulating or how to deal with it, please contact DebtCare Canada today by calling 1 (888) 890-0888.