debtcare.ca

Author: mgoldenberg@debtcare.ca

  • Tax Debt: Are You Self-Employed but Haven’t Filed Yet?

    Tax Debt: Are You Self-Employed but Haven’t Filed Yet?

    tax debtWe are well into July now and that means, if you are self-employed, your tax filing deadline has passed.

    If you filed on time, great, you’re set for another year. However, if you’ve yet to file, for whatever reason, you may be facing some serious penalties and a significant tax debt.

    Many people don’t file because they know they will end up owing and can’t pay or don’t have proof to support various write-offs.

    Often these individuals put off filing until the money to pay can be amassed (whether or not this is a realistic goal), while others choose to hold off in the hopes that the Canada Revenue Agency (CRA) will not be made aware of the transgression. Trust us, they will find out.

    The CRA is often the most aggressive when it comes to trust monies and tax debt. So, if you’ve collected HST all year, but didn’t file by the deadline, and thus have not declared or submitted these trust monies, the CRA is going to come in search of those funds.

    The CRA charges a late filing penalty of 5% of your balance owed plus an additional 1% for each month your return is late.

    As long as your return was filed by the June 15th deadline, you don’t have to worry about these penalties. However, you still have to worry about interest.

    Interest is charged on any unpaid balances at the established rates which are set by the CRA on a quarterly basis.

    Although your tax return is due on June 15th, interest will start to accrue the day after the personal tax filing deadline (April 30th). That means, whenever you do decide to file, if you owe, those penalties will be applied retroactively.

    Once the CRA is made aware of your debt, that’s when things can really start to get ugly. Although it is not illegal to owe a tax debt to the CRA, and thus prosecution is not a consequence, collection enforcement action is.

    Garnishments of your income, a frozen bank account, even a tax lien may be in your future.

    Our goal here is not to scare you.

    If this is the situation within which you currently find yourself, you’re probably already concerned and are looking for tax debt consolidation. Our goal is to impress upon you the importance of dealing with tax debt as soon as possible.

    Ignoring the problem will never make it disappear. It will actually just make things worse.

    If you’ve held off filing your taxes because you know you won’t be able to make the necessary payments, we can help with tax debt relief. At DebtCare, we have years of experience helping Canadian self-employed individuals and small business owners tackle troublesome tax debts.

    Get in touch with us today by calling 1 (888) 890-0888.

     

  • Don’t Help the Canada Revenue Agency Take Collection Action

    If you owe money to the Canada Revenue Agency (CRA), you can be sure that the next few months will find you dealing with various attempts to collect. The CRA is quite aggressive when it comes to collecting a tax debt, and waiting for you to pay up just isn’t the name of their game. Don’t make it any easier for them to begin collection action.

    If you receive a legitimate communication from the CRA asking for financial information, you may think that providing such would be harmless or may prove favourable when attempting to negotiate a payment plan. For example, if an agent calls and asks where you bank, or who your clients are (if you’re self-employed), you may feel like this is a reasonable request and provide the information.

    The same goes for forms they may ask you to fill out. While you might think that completing these forms will result in a fair payment arrangement – they may even allude to such – it typically won’t.

    Think those questions are risk-free or safe? Beware. This information will be used for collection action.

    What questions lead to enforcement action?

    • Where do you bank = frozen bank account
    • What is your address = property lien
    • Where do your work = wage garnishment
    • Who are your clients = garnishment to clients, up to 100%

    Aren’t these things the CRA already knows, or can find out on their own? Sometimes yes, sometimes no, but even in the case of things they can find out, why do the legwork for them, thereby making it easier for them to hurt you?

    When you can’t pay, but you’ve answered the questions and filled out the forms, the CRA now has all of the information they need to come after you. The CRA isn’t interested in long-term payment plans and they won’t reduce the amount that you owe! Any arrangement will disallow payments to other creditors (loans and credit cards), thereby decimating your credit, as well as other expenses. If money is owed, the CRA wants it, right now.

    If the CRA is asking questions and you know that you owe but can’t pay in full, it is time to get professional representation. We strongly recommend that you DO NOT complete these forms or answer any financial/personal questions without first speaking with a financial professional.

    At DebtCare, we can help you navigate the dangerous CRA waters.

    Get in touch today by calling 1 (888) 890-0888.

     

  • Who Does a Bankruptcy Trustee Represent?

    While bankruptcies and consumer proposals are two common practices for Canadians looking to deal with problematic debts, they can also be somewhat confusing or misunderstood. One of the most common misconceptions comes with regard to who a bankruptcy trustee represents. This blog aims to clear the confusion.

    In the simplest terms, a personal bankruptcy in Canada is a legal process whereby a bankruptcy trustee is appointed to administer your estate and distribute any assets to your creditors. With a consumer proposal, a financial calculation is done based on your income and assets and a proposal is put forth to your creditors based on a sum that you would pay back. In this case, a trustee administers the proposal with your creditors.

    While it may sound, in both circumstances, as though they represent you, the reality is more complex.

    A trustee is a legally appointed official, regulated by the government. They are required to represent all parties involved, namely the debtor and the various creditors. This means that, while the trustee does represent you, they are also required, by law, to represent your creditors as well. Their job is to administer your estate to ensure all parties are satisfied.

    Another issue arises with regard to payment, specifically in the case of a consumer proposal. With a consumer proposal, since a bankruptcy trustee is paid based on the size of the proposal (the total sum to be repaid), there is some motivation to obtain a higher payout from you.

    Since a bankruptcy trustee is the only person who can legally administer a bankruptcy or consumer proposal in Ontario, you can’t remove them from the equation. However, you can obtain your own representation to help you work through the process, a person who will help protect you and your assets. A financial consultant can examine your current financial circumstances, determine, in consultation with you, your financial abilities as far as repayment, and help structure the negotiation with the trustee to ensure the best possible deal. Furthermore, working with a financial consultant will give you access to the trustees they’ve worked with in the past, ones they know to be trustworthy.

    Our aim here is not to disparage bankruptcy trustees. There are many reputable, trustworthy trustees out there willing to do their best to achieve a satisfactory solution for all involved. However, it is always smart to have your own representation. Just as you would never head to trial without a lawyer, the same should be said for this financial situation.

    If you’re considering bankruptcy as a debt solution, DebtCare is the best place to start.

    Call us today for a free consultation to discuss your options: 1 (888) 890-0888.

     

     

  • Happy Canada Day from DebtCare

    Happy 150th Birthday Canada!

    Enjoy the Canada Day celebrations with family and friends, check out some fireworks and fill up on some great food! All the best on this momentous national occasion!

  • Demographic Shift? Worsening Income Inequality in Ontario Leading to Higher Rates of Insolvency

    Bankruptcy has, for decades, proven to be an incredibly important resource for those Canadians struggling to meet their monthly obligations, and for good reason. It provides a fresh start when things have become too difficult to handle, providing significant relief from overwhelming debts and reducing the overall amount a person is required to repay.

    That being said, worsening income inequality is making bankruptcy far more common a solution for certain segments of the population. Insolvency rates in Ontario are rising. The economy is making it more and more difficult for those in certain situations to meet rising costs. Who is filing most often? Seniors, millennials and single parents.

    According to a study reviewed by the Globe and Mail, seniors over the age of 60 account for 12% of insolvency filings, whereas those under 30 account for 14%. Single parents were also disproportionately represented in the findings. While single-parent families account for about a fifth of Canadian families, they represent 43% of households with dependents who file.

    For millennials, student loans are a big part of the problem, as is the tough job market. Tuition costs have risen across the country, making it harder and harder for the average Canadian student to obtain a diploma or degree without some debt following them off campus. According to Statistics Canada, the average full-time undergraduate student is paying nearly $6,400 in tuition for the 2016-2017 school year, compared to about $4,400 a decade ago. That’s a big difference. Where is the money coming from? Most often from student loans.

    For seniors, or those looking ahead to retirement, debt is rising (and thus the number of bankruptcies), often thanks to a desire to help their children enter this incredibly turbulent housing market or pay for those sky-high tuition fees.

    Another problem for both millennials and single parents struggling to make ends meet is the dreaded payday loan. With advertisements claiming loans for as little as $1, many heads are turned in the belief that payday loans are the answer for quick cash. However, these have proven to be quite devastating because they quickly become almost impossible to pay off.

    With income inequality continuing to make it harder for certain demographic groups to live without debt, bankruptcy represents an important debt solution that can narrow the gap. If you’re looking to take advantage, just remember to speak with a financial consultant first to secure your own representation, before heading to a trustee in bankruptcy. Since bankruptcy trustees represent both you and your creditors, it is best to have someone with you who has your back.

    At DebtCare, you are our first and only concern. If you’re looking for more information about bankruptcy, please get in touch with us today: 1 (888) 890-0888.

     

  • CRA는 강제 채권 추심을 하기 위하여 법원의 명령을 필요로 하나요?

    CRA는 강제 채권 추심을 하기 위하여 법원의 명령을 필요로 하나요?

    캐나다 국세청 (Canada Revenue Agency)에 갚아야 할 빚이 있을 경우 그것은 일반적인 채권자에게 상환하는 것과는 매우 다르긴 하지만 동시에 아주 흡사하기도 합니다. 은행과 같은 일반적인 채권자가 실제로 부채를 회수하기 위한 조치를 취할 수 있는 것처럼, CRA도 그와같은 조치를 취할 수 있지만 CRA는 채권 추심을 위하여 그와 동일한 방법을 따를 필요는 없습니다. 일반적인 채권 추심 회사는 채무자에 대한 강제 집행을 하기 전에 법원의 집행 명령을 받는 등의 특정 조치를 취해야 합니다. 그러나 CRA 의 채권 추심은 그럴 필요가 없습니다.

    CRA의 채권 추심은 법원의 승인을 얻지 않고 은행 계좌 동결이나 급여 압류 심지어는 여러분의 주택에 대한 저당 설정과 같은 강제 추심 조치를 취할 수 있습니다.

    또한 그들은 여러분(채무자)에게 시행 조치를 알릴 필요도 없습니다.

    CRA 가 추심 집행 조치를 취하게 되면, (부채를 전액 지불하는 것 이외에) 이를 해제할 수 있는 유일한 방법은 개인 회생이나 파산을 통한 방법뿐 입니다.

    개인 회생에서 회생의 제안은 여러분의 채권자들에게 이루어 지게 되며 – 이 경우에는 CRA(국세청)- 여러분의 부채와 소득 및 지출을 바탕으로 계산하여 제안합니다. CRA가 회생 제안을 수락하게 되면 여러분은 월 1회의 상환을 할 수 있게 되며 이자 가산이 중지됩니다. 회생 신청이 접수됨과 동시에 채권 추심도 중단되게 됩니다. 개인 회생은 채권 추심과 이자 가산을 중지시킬 뿐 아니라 많은 경우에 세금 부채의 전체적인 금액을 줄여줄 수도 있습니다. 개인 회생의 상환은 5년이 걸리며 이것은 여러분이 CRA에 직접 연락하여 협상을 한 경우보다 훨씬 긴 시간일 것입니다. 따라서 월별 지불액도 더 적게 됩니다.

    파산의 경우에는 그 프로세스가 다릅니다. 여러분은 CRA에 제안을 하는 것이 아닙니다. (첫번째)파산을 할 때는, 소득을 계산하여 합리적인 월 상환액을 정하게 됩니다. 파산 신청이 되면, 여러분의 소득에 따라 9개월이나 21개월동안 파산 비용을 지불하게 됩니다. 파산 비용의 완납과 모든 소득의 공개, 잉여 소득의 지불 및 신용 상담의 참여와 같은 모든 파산 조건을 완료하면 여러분은 파산 면책을 받을 수 있고 신용 회복을 시작할 수 있습니다. 파산 역시 개인 회생과 마찬가지로 CRA가 파산 사실을 통보 받자 마자 채권 추심은 중단되게 됩니다.

    개인 회생 및 파산은 모두 파산 관재인(트러스티)에 의해 관리되지만, 파산 관재인을 직접 찾아가는 것은 권장하지 않습니다. 트러스티는 여러분의 대리인이 아니며 그들에게 제공한 모든 것들은 CRA와도 공유됩니다. 가장 좋은 방법은 먼저 재정 컨설턴트와 이야기하는 것으로 재정 컨설턴트는 이러한 프로세스를 관리 할 수 ​​있으며 계획을 세우는데 있어 재정 정보를 기밀로 유지할 수 있습니다.

    DebtCare에서는 여러분을 보호할 수 있는 전략으로 도와드립니다. 1-866-413-3716 저희에게 먼저 연락하세요.

  • 개인 회생과 파산의 차이점은 무엇인가요?

    개인 회생과 파산의 차이점은 무엇인가요?

    우리는 가끔씩 재정적인 문제의 해결을 염두해 두고 파산과 개인 회생의 차이점에 대해 질문하시는 고객분들이 만나게 됩니다. 감당할 수 없게 된 부채를 해결하려 할 때 이 두 가지 프로그램 모두는 매우 가치있는 제도이지만, 이 둘 사이에는 중요하고 명확한 차이점이 있습니다. 오늘은 이 둘의 차이점에 대하여 다루어 보려고 합니다.

    개인 회생이란 무엇인가요? 개인 회생 (consumer proposal)은 채무자가 채권자에게 자신의 소득을 기준으로 일반적으로는 5 년동안 부채를 상환하겠다는 상환액을 제안하는 제안서를 제출하는 것입니다. 이 상환액은 현재 가지고 있는 부채보다 훨씬 적어지는 경우가 많습니다. 모든 채권자가 회생 제안서에 포함되어야 하며 다수가 동의해야 회생 신청이 성립되게 됩니다. 일단 제안이 수락되게 되면, 여러분은 파산 관재인(trustee)에게 월 1회의 상환을 하게 되며 이 지불 금액은 여러분의 채권자들에게 분배되게 됩니다.

    개인 회생에는 다양한 이점들이 있습니다. 첫째, 위에서 언급한 바와 같이, 상환해야 할 금액이 실제 여러분이 가지고 있는 부채 금액보다 훨씬 적어지게 되는 경우가 많습니다. 또한 개인 회생이 신청되면 이자 가산이 멈추게 되며 채권자는 추심 조치를 중지해야 합니다. 이는 어떠한 종류의 소득 차압이나 은행 계좌 지급 정지가 설정되어 있더라도 해제되어야 함을 의미합니다.

    파산이란 무엇일까요? 채권자들에게 상환할 금액을 제안하는 개인 회생과는 달리, 파산 신청을 할 때에는 부채의 면책을 대신하여 자신이 소유 한 모든 것을 파산 관재인에게 양도 할 법적 계약을 체결하게 됩니다. 파산을 하게 되면 합의된 금액에 대해 지불을 하는 것이 아닌 여러분의 소득을 기반으로 파산 면책까지의 지불해야 할 개월 수가 결정되게 됩니다. 처음으로 파산을 한 사람은 일반적으로 9개월이나 21개월로 파산 면책을 받게 됩니다. 지급 기간과 파산 조건들을 완료하게 되면 파산 면책을 받게 되고 파산은 끝나게 됩니다.

    파산 조건을 완료한다는 것은 매달 파산 비용을 지불하는 것 이상을 의미합니다. 이는 또한 신용 카운셀링에 참석하고 여러분에게 발생하는 모든 추가 소득을 공개해야 하는 것을 의미합니다. 만일 여러분이 파산 신청을 할 시보다 파산 기간 동안 더 많은 소득을 벌게 된다면, 여러분은 추가 잉여 소득의 대상이 되어 파산에 대해 추가 지불을 해야 하게 될 수도 있습니다.

    파산 역시 개인 회생과 마찬가지로 다양한 이점이 있습니다. 월 1회의 상환과 이자 가산의 중지 및 채권자는 현재 여러분에게 취하고 있는 모든 강제 추심 조치를 중지해야 합니다.

    어떠한 옵션이 여러분에게 가장 적합한가요? 다른 주요한 재정에 관련한 결정과 마찬가지로 이 질문에 대한 대답 역시 현재 여러분의 재정 상황에 따라 달라집니다. 주요한 고려 사항은 여러분이 얼마의 소득을 벌고 있는지 뿐만 아니라 여러분이 보유한 자산이 무엇인지에 대한 것입니다. 재정 컨설턴트는 여러분의 재정 현황을 검토하고 개인의 상황에 가장 적합한 솔루션을 찾아 추천해 줄 수 있습니다.

    마지막으로 한가지 더 기억해야 할 사항은 개인 회생 및 파산은 모두 파산 관재인에 의해 관리되어지나 주의해야 할 점이 있습니다. 이들은 여러분 대변하는 동시에 여러분의 채권자를 대변하게 됨으로 여러분의 이익을 보호하지는 않습니다. 여러분을 보호해 줄 수 있는 사람인 재정 컨설턴트와 가장 먼저 이야기 하시기 바랍니다. 그들이 여러분을 대신해서 여러분의 편에서 협상해 줄 것입니다. DebtCare는 여러분의 편이 되어 드릴 것입니다.

    DebtCare 1-866-413-3716으로 먼저 연락하시고 자신을 보호하시기 바랍니다.

  • How to Stop a CRA Wage Garnishment

    With the tax season behind us, those sitting with tax debts may be concerned about payment plans and what actions the Canada Revenue Agency might take to obtain money owed. A CRA wage garnishment is a very common form of enforcement action. If you’re concerned about a possible garnishment, or are currently trying to have one removed, read on.

    The CRA does not need a court order to obtain a wage garnishment. They do not even need to warn you when one is being initiated. They can garnish up to 50% of employment income and 100% of other income, such as contracts and pension income, simply by sending a letter to your employer or clients (if you are self-employed).

    Once a CRA wage garnishment is in place, it becomes even harder to negotiate with the CRA. Often the only way they will agree to remove it is by receiving payment in full.

    If this is not feasible, don’t worry, you have other options.

    To get a garnishment lifted, you may want to consider bankruptcy or a consumer proposal. Once either is filed, the garnishment will be stopped immediately.

    In the case of a consumer proposal, your creditors must accept it to move forward, so if the proposal is not accepted, the garnishment can be re-initiated. However, a strong, well-positioned proposal will most often be accepted.

    In a bankruptcy, a wage garnishment will be stopped, period. There is no need for creditors to accept anything. Once the paperwork has been filed, all enforcement action must cease.

    Knowing which option is best for you depends on your personal circumstances – your income, assets, family composition, debts and more. Discussing your situation with an experienced financial consultant is the most effective way to determine which option will serve you best, both in the short-term and over time.

    Tax debts can’t be ignored – they won’t just disappear on their own, and the CRA can be incredibly aggressive when it comes to collecting. The most important thing that you can do when you have a tax debt is look for a solution as soon as possible. Waiting may just find you struggling to make ends meet. A wage garnishment can be embarrassing and can seriously impact your ability to continue meeting your monthly financial obligations.

    If you are stressed about a current or probable CRA wage garnishment, DebtCare can help. We have years of experience helping Canadians with such problems.

    Call us today for a free consultation: 1 (888) 890-0888.

     

  • How Much is Enough Debt to Warrant a Consumer Proposal?

    Consumer ProposalConsumer Proposal 101 – How Much is Enough Debt to Warrant a Consumer Proposal?

    For those struggling with debt, a consumer proposal represents a very valuable debt solution. If you’ve been thinking about taking advantage of such a solution, there are a few things you may want to know, and this week our goal is to help answer those questions.

    Firstly, to file a consumer proposal in Canada, you must meet the following qualifications:

    • Be an individual (not a business)
    • Be unable to pay your debts
    • Your total debts must not exceed $250k (not including the mortgage on your principal residence)
    • Be able to show that you can pay back the proposal on a monthly basis
    • You can’t be an undischarged bankrupt or in an existing consumer proposal

    When it comes to how much debt is enough to warrant a consumer proposal, there is no established minimum, but people don’t generally file a consumer proposal unless they owe $8000 or more.

    The decision to file a consumer proposal should be less about the total amount of your debt and more about your ability to honour your monthly obligations.

    For example, some people who are honouring their monthly payments of debt choose to file a consumer proposal because they can only manage minimum payments and with interest there is no way that they will ever be able to pay off all their debts.

    How does a consumer proposal work?

    To start, your finances will need to be reviewed and a sum will be arrived at based on a financial calculation of what you can afford monthly. Based on this, a sum that would be distributed to your creditors would be proposed to those creditors as a full and final arrangement.

    If the sum is accepted by your creditors, your proposal moves forward.

    Once accepted, your overall debt is often reduced, interest stops, collection action stops and you are left making a monthly payment over a term of often 4-5 years. A proposal can be paid in full at any time.

    Something to keep in mind is that proposals are administered by bankruptcy trustees, also known as Licensed Insolvency Trustees or LITs. While this individual represents you, they also represent your creditors – they have to do what they believe is best for both parties.

    It is always advantageous to first speak with a financial consultant who specializes in consumer proposals to understand the true scope of what you would be getting into, to better understand the pros and cons, and then structure the financial information to later be presented to the trustee. This way you are as protected as possible throughout the process.

    At DebtCare, your financial consultant works for you, not your creditors, resulting in the best deal for you! Want to find out more about how consumer proposals work?

    Get in touch today by calling 1 (888) 890-0888.

     

  • Paying Off OSAP: Student Loans, Consumer Proposals and You

    When you’ve studied tirelessly and spent years working towards that well-earned degree or diploma, the last thing you want to think about once you graduate is the debt that accumulated in your quest to obtain it. Unfortunately, student loans are unique in their formation, particularly OSAP loans, and so today we attempt to clear the waters. Today we’re talking student loans, consumer proposals, and how you can finally get yourself back on stable financial ground.

    As you’re no doubt aware, depending on the years spent in post-secondary academia and the amount of funding you borrowed in order to get that coveted piece of paper, student loan debts can become quite large. Typically, when you’re studying, and thus paying interest only, or, in the case of an OSAP loan, nothing at all, the debt may not seem like a big deal. However, once you graduate and are required to start paying it back, with interest, things can become very challenging, very quickly.

    A consumer proposal has become a very valuable resource for those looking for relief from debt that has grown to overwhelming proportions. Consumer proposals are great because, in addition to stopping interest and combining the various payments into one manageable monthly payment, a proposal typically results in an overall reduction of your total debt. However, there are certain things you need to know with regard to OSAP loans and consumer proposals.

    First things first: the only way to clear an OSAP loan if you have not been out of school for 7 years is to pay it in full. If that 7 year period has not passed yet, a consumer proposal (CP) won’t result in a reduction of that debt, and once the CP is over you’ll still be required to pay it. That being said, even if it isn’t reduced, a portion of your proposal payment will go to the OSAP loan in addition to your other creditors.

    On that note, if you are facing enforcement action as a result of the OSAP loan, a consumer proposal will stop it, even if you have not been out of school for 7 years. This is an important consideration if your wages are being garnished or your bank account has been frozen.

    On the other hand, if an OSAP loan is over 7 years old – meaning you’ve been out of school for 7+ years – you can include it in a consumer proposal. This means, in addition to the other debts you’ve accumulated, the overall OSAP loan will likely be reduced.

    So, to summarize, if collection action has commenced prior to the 7 year date, a consumer proposal will stop all enforcement action. You will be required to pay the loan in full, but you will have some relief, especially when your other creditors are included in the proposal. If you’ve been out of school for more than 7 years, you can include it as you would any other debt.

    At DebtCare, we know how difficult it can be to deal with student loans. Often a consumer proposal represents your greatest opportunity for relief. Want to discuss your options?

    Please get in touch with us today by calling 1 (888) 890-0888.