Monday, 23 March 2015

Ahead of the Game: Tax Debt Relief Before the Tax Deadline

The deadline for filing your 2014 tax return is fast approaching, and that means getting all of your ducks in a row to be able to meet those tax obligations that often arise once your assessment is returned to you. For those who know they won’t owe, this time of year represents just an added bit of necessary hassle – but for those individuals who either already owe a tax debt, or know that one is looming, this time represents significantly more stress.

If you are in the latter group, avoiding the issue is never a good idea. If you owe the CRA money, they will try their very best to get it – as soon as possible. This might mean leveraging various enforcement actions against you, including wage garnishments, frozen bank accounts or even property liens. Pretending the problem doesn’t exist isn’t going to make it go away.

Here are some options to consider for tax debt relief that may be beneficial:

Negotiate with CRA
  • As mentioned, when the CRA is owed money, they will try their best to get it. Calling to negotiate with an agent might work as far as getting a payment plan in place – but there are number of things to be careful with when it comes to this option.
    • The CRA isn’t interested in your financial situation, and if you don’t have the extra income to pay the debt they are still going to attempt to get the maximum amount possible.
    • Miss one payment and they will leverage those above mentioned enforcement actions almost immediately.
    • Once you’ve called the CRA and tried to negotiate a payment plan, the CRA will be aware of all of your personal information – including your banking information – making self-protection almost impossible.
  • This option is usually one that is best accomplished by having an expert act on your behalf and not by acting on your own.
Consumer Proposal or Bankruptcy
  • If your tax debt is substantial, both of these options can offer a significant amount of tax debt relief. Either one might offer the benefit of a reduced debt and/or interest, and can ensure that your monthly payments are set at an amount that you can handle.
  • Neither of these options can be achieved on your own – as legal processes, both need to be conducted by a trustee in bankruptcy, someone with the knowledge and experience conducting these forms of debt relief. Just make sure to get the advice or assistance of a debt consultant first to represent you through the entire process.
Debt Consolidation
  • Need to free up some money to be able to meet those tax debts head on? A debt consolidation may be the answer. This is also something to be considered when consulting a debt specialist.
For many Canadians, this time of year is one that leads many to think about tax debt relief and how to obtain it. DebtCare Canada can help. Call us today at 1-888-890-0888.

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