debtcare.ca

Author: mgoldenberg@debtcare.ca

  • 如何处理加拿大所得税债务 （Income Tax Debt）

    如何处理加拿大所得税债务 （Income Tax Debt）

    报税季节已到。对于那些会得到大额退税的人来说，这是让人兴奋的时刻。但是，对于那些没有退税反而要补税的人来说，却是一件令人惆怅的事情。报税后要面对一大笔所得税债务，同时你又无法付清，光是想一想就已经令人倍感压力。

    其中一个让人觉得恐怖的原因是，一旦税务局评定了你所欠的收入所得税的总数，他们将要求你一次还清。加拿大税务局拥有强大的权力追收被欠的收入所得税。加拿大税务局的讨债措施包括发信、电话追讨，甚至实行强制行动譬如扣押工资，下发税收留置权等。

    人们拖延或逃避报税的主要原因是害怕税务局评定了欠税后对他们采取的强制行动。但是如果你欠了所得税，拖延或逃避报税却是你对自己所做的最糟糕的事情，因为这是违法的。另外，税务局会在欠税总额上累计利息和罚金，随时随地可能会让你的欠税翻了一倍。

    那么当纳税人报税后，发现欠下一笔无法支付的税款，他们能作何选择？

    任何问题的解决方法都应该有一个周全的计划安排。首选，你不必独自解决。很多机构都提供解决所得税债务的帮助。向债务或财务顾问了解更多办法也是为你排忧解难的一个选择。

    一个好的解决方案会就你的收入、资产、个人债务（除了所得税债务之外，你所欠的银行借款、信用卡债务等）进行全面性的评定，这样你的理财顾问才能制定一套可行性高的还款计划向税务局证明你有足够能力在支持生活开支的同时，又能按时偿还税款。

    审视了自己的财政状况后，万一你发现自己根本没有能力向税务局缴还税款，你该如何是好？不能缘木求鱼，却也不能忽略这个问题，因为税务局对你采取的措施将严重扰乱你的生活。

    如果你找不到任何办法可以缴纳欠税，你可以从联邦政府项目中得到解脱，它能为你减免利息、罚金、甚至是原定的税款总额。参与其中一个项目也许能让你松一口气，因为这也许会给予你足够的时间慢慢缴还欠税。

    其实你不需要惧怕加拿大的所得税债务，因为在这些债务急剧上升之前，你还能寻找到很多可以协助你解决问题的资源和方法。

    如果想了解更多资讯，欢迎浏览我们的网站debtcare.ca/Chinese, 或通过电话：1-866-260-9672 电邮：kchen@debtcare.ca。

  • 谁能在债务重组当中维护你的最大权益？

    谁能在债务重组当中维护你的最大权益？

    很多加拿大人都处于负债处境，债务重组建议书（consumer proposal）是一个很有价值的解决渠道。它能为你减免可观的债务数目和利息，合并所有债务至一笔你可以轻松支付的月付款，这些无疑都是意义重大的好处。同时你也需要知道，债务重组是一个复杂的法律程序，而且必须由破产师管理和执行，那么紧接的问题就是，谁能担任你的代表顾问？

    关于这个问题，人们经常觉得很疑惑。要知道，破产师常常宣传他们的服务是为你解决债务的方案。一旦你参与了他们的服务计划，他们代表你的这个事情看似是一个安全合理的设定。然而这并非完全正确，破产师的确是在债务重组建议书/申请中代表你，但是他们同时也代表你的债主。

    在管理债务重组申请的时候，破产师是不能偏倚任何一方的，在向你提出最优解决方案的同时也要确保这是对债主最公平的选择。另外要注意的是，破产师是根据你的债务重组最终还款数目得到一定比例的酬劳的。也就是说，你的债务重组金额越大，他们就赚取更多。在谈到保护你的时候，这就已经产生了一个主要的利益冲突了。

    第一次与破产师见面的时候，他们会询问你的个人财务状况。假设初次会面时破产师是代表你的权益，但你的独自前往也可能导致一些不必要披露的信息被问出。这些信息也许会用于帮助债主获得大额债务重组（对于你就是小额减免），破产师也会获得更高额的酬劳。

    没有任何代表陪同前往会见破产师就相当于你不带代表律师上庭。大多数情况下，我们都认为这是相当危险的做法，因此我们也是不建议的。同理应用于债务重组上，你应该也希望在考虑申请债务重组时有专业代表人可以提供最恰当的建议，确保你的财产受到保护并无需担心债主的各种追债手段。

    这篇博文的主旨并非抨击破产师不值得信赖。大部分破产师都很专业，但是政府的法规要求他们对各方公平，这自然就会造成矛盾和问题。归根究底，我们其实只是想提醒你在会见破产师之前保障好自己。

    联系经验丰富和熟悉重组项目的顾问，有需要的时候也可聘请这些专业人士以免除后顾之忧。他们可以作为你的代表和破产师进行交涉谈判，为你争取最好的债务减免计划。

    DebtCare Canada和数家信誉良好的破产师公司都有长期稳定的合作关系，我们绝对有信心可以在整个过程中保证你得到最好的服务和最优的方案。

    联络破产师之前，拨通我们的电话1-866-260-0397进行免费咨询。

  • Breaking Down Second Mortgage Options and Costs

    A second mortgage is an excellent tool for dealing with debt. In recent years, many Canadians have come to recognize the value of using their home to consolidate debt. Today we discuss second mortgage options and costs and the benefits of using your home to deal with debt.

    Firstly, a second mortgage is great because it has nothing to do with your first mortgage, so you can structure it like a traditional debt consolidation while taking advantage of lower interest rates.

    For example, you don’t HAVE to amortize a second mortgage over 25 years as you would with a first mortgage. You can choose to amortize it over 5 or 10 years to see the debt paid off faster.

    Secondly, using a second mortgage to consolidate debt will often result in a much lower interest rate compared to the credit products you are currently concerned about.

    There are lots of different second mortgage options depending on your equity positioning and credit standing.

    If you have good credit, a line of credit or conventional second mortgage through a bank at a great low rate are two attractive options. With a line of credit, amortization is not required and your monthly payment will be based on the balance. That being said, selecting a line of credit will mean you need to be more disciplined because minimum payments are often 1-2% of the balance and thus very little will get paid to principal if you only make minimum payments. When choosing between a conventional second mortgage and line of credit, be sure to look at how long you want to be paying the debt and reverse calculate what your payments will look like – a good mortgage broker can help you do this.

    If you have bad credit, this will likely reduce your options and can mean higher rates, albeit usually still far less than a high interest loan from a finance company. If your credit is only slightly bruised, a finance company or trust company may extend second mortgage financing to you. However, if it is really bad you will need lots of equity and your broker will likely get your mortgage financed through a private lender. Most private lenders charge on an interest- only basis, however some may allow you, as with a line of credit, to pay more than the interest if your budget will permit. In this case, you’ll also want to check if the lender offering the mortgage will allow you to make extra payments without penalty.

    Keep in mind that second mortgage financing is a mortgage so you will have some fees. Potential fees could include (and this largely depends on how good or bad your credit is – good credit means fewer fees) a broker fee (lender may pay all or part if credit is good), legal fees (often less with lines of credit), application or administration fees from lender, and an appraisal (if your mortgage is not CMHC insured).

    Going directly to a lender is never a good idea. It is better to deal with a broker because they work with ALL lenders and can explore all options to get you the best deal. This is also important if your credit is bad as only brokers can obtain private mortgage financing.

    If you’re interested in finding out more about using second mortgage financing to consolidate debt, DebtCare can help.

    Call us today at 1-888-890-0888.

     

  • Protecting Your House When You Have a Tax Problem

    Tax season is officially upon us, and many Canadians have already filed or have at least started the process. While a bit of a hassle, it is usually not accompanied by a great deal of stress. However, if you are like one of the countless individuals sitting with the knowledge that a tax debt is looming once you file, or if you’re still dealing with a tax problem from previous years, stress is likely something you are dealing with on a daily basis. Today we talk about how to protect your home when a tax problem is hanging over your head.

    If you own your home and have a tax problem, you really do have to act fast. You need to have a plan to deal with the debt before it becomes a major issue.

    Why? The Canada Revenue Agency is very strict when it comes to obtaining money owed. Enforcement action is very common, and when you own your own home a property lien is an effective method to achieve this. Once a property lien is in place, it becomes very difficult to access any equity to secure a loan, the CRA becomes a secured creditor, meaning a proposal or bankruptcy becomes more difficult, and if you choose to sell, they get your equity to cover the tax debt.

    When there is no lien you have options:

    Refinancing your home to pay the tax debt is an important option to consider. Accessing the equity you currently have may give you the ability to cover a significant debt, thereby avoiding enforcement action.

    If you don’t have enough equity, or your credit will not support a refinancing of your home, a consumer proposal or bankruptcy may be good to consider. Both can help you deal with a tax problem before it balloons.

    What about transferring the home into someone else’s name – won’t that solve the problem? No! Doing so will only transfer the tax debt to that person. The CRA uses Section 160 of the Income Tax Act on a regular basis against those who attempt to avoid a tax problem in this way.

    Protecting your house means acting fast and looking at what you can leverage now to deal with the tax problem is crucial. As mentioned, the moment the CRA places a lien on your home, your options decrease exponentially.

    When a tax problem has you losing sleep, get in touch with DebtCare. We can help you get the debt sorted and help you protect your home in the process.

    Call 1-888-890-0888 today.

     

  • CRA Tax Consequences: Late Filing Penalties

    The Canada Revenue Agency timeline requirements which all taxpayers must abide by are well known. As a Canadian, you are required to file your income taxes by a certain date each year, and failing to file on time can result in penalties and interest assessed, often inflating a tax balance owing by an overwhelming amount.

    For income tax returns, possible CRA late filing penalties and interest include:

    Late-filing penalty: If you owe a tax debt and don’t file your return on time, you will be charged a late-filing penalty. Currently, the penalty is 5% of the balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. If you have repeatedly filed late, the late-filing penalty may increase to 10% of your balance owing, plus 2% of your balance owing for each full month your return is late, to a maximum of 20 months.

    Interest: If you have an unpaid balance, you will be charged compound daily interest on that amount. You will also be charged interest on any penalties charged. The rate of interest charged by the CRA can change every three months.  Interest rates are published on the CRA’s website.

    In addition, if you continually fail to file on time, or have failed to report income in previous years, you may be subject to additional penalties.

    Repeated failure to report income penalty: If you fail to report an amount on your return (whether intentionally or in error), and you also failed to report an amount in any of the previous three years’ returns, you may have to pay a federal and provincial/territorial repeated failure to report income penalty. The federal and provincial/territorial penalties are each 10% of the amount that you failed to report on your current return.

    It is easy to see how that tax debt can quickly grow after adding in penalties and interest, isn’t it?

    Just wait – these penalties, while significant, may not be the only ones you face due to late filing. While owing a tax debt is not illegal, failing to file is considered tax evasion and you can be prosecuted. Don’t think that can happen to you? Just check out the countless average Canadians prosecuted every day: http://www.cra-arc.gc.ca/nwsrm/cnvctns/menu-eng.html.

    Wait, there’s even more! If the CRA thinks that you have been negligent, gross negligence penalties equal to up to 50% of the tax debt may also be added.

    Knowing that a large tax debt will be on file once you’ve filed can be stressful, but if you’re considering not filing to avoid it this is the worst thing you can do.

    A tax debt is not a legal problem – it is a financial one. This means that you will need a financial plan to resolve it. There are financial solutions for dealing with a tax debt – even if it appears that you have no way to pay the debt. Get serious about your tax debt and seek help. Even with a large tax debt, the best course of action is to speak with a professional who understands the problem and can offer real solutions.

    At DebtCare, we have years of experience dealing with tax debts. We can help you find a way to pay it off, as soon as possible.

    Get in touch today: 1-888-890-0888.

     

     

  • Who Represents You in a Consumer Proposal?

    For many Canadians drowning in debt, a consumer proposal is a very valuable resource. The ability to reduce the amount of debt you owe, reduce interest and combine all payments into a single monthly payment you can afford, are all really significant benefits. That being said, a consumer proposal is a complex legal process, one that must be administered by a trustee in bankruptcy, so the question remains, who represents you in a consumer proposal?

    Often people are confused when it comes to this question. After all, trustees often market their services as a solution to your debt problems, and since you’ve enlisted their services, it would seem a safe assumption that they represent you. And that isn’t necessarily an incorrect assumption. A trustee does in fact represent you in a consumer proposal. The problem is, they also represent your creditors.

    When administering a consumer proposal, a trustee is required to be an impartial party, presenting the best solution for you and a fair option for your creditors. The issue with this is that trustees are paid based on a percentage of your proposal, so the bigger the proposal, the more they earn. This creates a major conflict of interest when it comes to protecting you!

    When you first meet with a trustee, they will ask you to provide information about yourself and your finances. Entering this meeting assuming the trustee is representing you and you alone can result in you providing information not necessary for the administration of the consumer proposal. This information may then be used to obtain a larger amount for your creditors, and thus a larger paycheque for your trustee.

    Going to a trustee without representation is like going to court without a lawyer. Most, we would argue, would see this as a rather dangerous idea, and thus is one we would advise against. It is the same with a consumer proposal. You want your own representation when considering a consumer proposal – representation to provide protection for you and your financial assets without having to also worry about your creditors.

    The point of this blog is not to argue that trustees cannot be trusted. Most can, but government regulation requires them to be fair to all parties, which naturally results in issues. The point is to inform you of the dangers of calling a trustee before securing your own representation.

    Our advice is to speak with a financial consultant who can protect you, one hired by you to represent you so there are no repercussions in telling them everything. They can negotiate your consumer proposal with a trustee so that the deal proposed is likely to be successful.

    At DebtCare, we have longstanding relationships with several trustees and can protect you throughout the process.

    Contact us today before contacting a trustee directly. 1-888-890-0888.

     

  • What to Do if You Have a Large Tax Debt That You Can’t Pay

    Many of us have been there; sitting with a major tax debt with no foreseeable way to pay it off. This is a common and incredibly stressful situation to find yourself in. The Canada Revenue Agency is ruthless, and when money is owed, you can’t ignore the issue. This week we discuss what you can do if the CRA is knocking on the door and you don’t have a way to pay.

    First of all, what will the CRA do if you can’t pay? The CRA isn’t interested in considering why you can’t pay. Instead, they will take enforcement action as soon as they feel it is prudent. This may include a wage garnishment, a frozen bank account or even a property lien. These are serious actions that can cause significant stress financially.

    Furthermore, the CRA does not require a court order to levy such enforcement action, nor are they required to notify you prior to putting one (or all) in place.

    So, what can you do to deal with a large tax debt if you don’t have the funds to pay it in its entirety?

    One option you may want to explore is taking advantage of the equity you have in your home. If you own your home and have paid off a significant amount, this may be easily done. However, if you don’t own your home, don’t have significant equity or have bad credit, this option likely won’t be open to you. Also, if the CRA has placed a lien on your home as a result of the tax debt, your ability to take this route is greatly reduced.

    Obtaining a personal loan may also be an option. This way you can break down the large debt into manageable monthly payments. However, as with accessing home equity, if you have bad credit you may not quality or will only qualify at a very high rate of interest.

    A consumer proposal or bankruptcy may be another option. These two represent an important option for those with debts aside from the tax debt. Both of these options can not only lower the overall debt, you can also stop worrying about interest accumulating. Both will also stop any current enforcement action the CRA (or any creditor) has taken against you.

    The best thing to do if you have a large tax debt is to formulate a plan. A good financial consultant, hired by you – not your banker or a trustee – can help by looking in depth at your finances and examining the different scenarios that are available to deal with your tax debt.

    A skilled financial consultant should understand financing options such as mortgages and lines of credit, insolvency (proposals and bankruptcies) and also CRA policy. They should be able to help you plan and administer the decided upon solution. You can also count on them to remain in your corner, protecting your interests throughout the entire process.

    If you have a large tax debt and can’t pay, time is not on your side. The longer you wait to deal with it the more leverage the CRA gains.

    Don’t wait. Call DebtCare today at 1-888-890-0888.

     

  • What is the Difference Between a Consumer Proposal and Bankruptcy?

    Often we have clients come to us with financial troubles looking for advice regarding the difference between a consumer proposal and bankruptcy. While both are very valuable resources when it comes to dealing with debt that has spiraled out of control, there are significant – and important – distinctions between the two. Today we discuss those differences.

    What is a consumer proposal? A consumer proposal is a process by which you put forth a proposal to your creditors presenting, based primarily on your income, an amount to be repaid on a debt over a period of typically 5 years. This amount is often far less than the current debt owed. All creditors must be included in the proposal and a majority must accept. Once accepted, you begin making a single monthly payment to your trustee which is then distributed to your creditors.

    The benefits of a consumer proposal are numerous. Firstly, as mentioned, the amount to be repaid is often far lower than what you actually owe. Additionally, when a consumer proposal is filed, interest stops accumulating and your creditors are required to stop taking collection action against you. This means that any wage garnishments and frozen bank accounts must be lifted.

    What is a bankruptcy? Unlike a consumer proposal where you propose an amount to your creditors, when you file for bankruptcy, you enter into a legal contract to assign (surrender) everything you own to a trustee in exchange for the elimination of your debts. In bankruptcy, you are not paying against an agreed amount – rather the number of months you have to pay is based on your income. For a first time bankrupt this is typically 9 or 21 months. Once you’ve completed the payment schedule and the terms of your bankruptcy, you are discharged and your bankruptcy is essentially done.

    Completing the terms of your bankruptcy means more than just paying monthly – it is also means participating in credit counselling and disclosing all extra income you receive. If you receive more income during your bankruptcy than what was provided at the time you filed, you may be subject to additional surplus income, meaning you will have to make additional payments in your bankruptcy.

    The benefits of bankruptcy are, as with a consumer proposal, numerous. You’re required to make only a single monthly payment, interest stops accumulating and your creditors must remove all enforcement action currently levied against you.

    Which option is best for you? As with any major financial decision, the answer to this question depends on your current financial situation. A main consideration is how much you earn as well as what assets you have. A financial consultant will be able to review your finances and recommend the solution that is best suited for your personal circumstances.

    One final note. Both a consumer proposal and bankruptcy must be administered by a trustee in bankruptcy, but be forewarned. While this individual does represent you, they also represent your creditors, meaning your interests are not protected. You are best served by speaking first with a financial consultant, someone who can protect you and negotiate on your behalf. At DebtCare, we stand in you corner.

    Protect yourself by calling us first. 1-888-890-0888.

     

  • Does CRA Collections Need a Court Order to Take Enforcement Action?

    When you owe money to the Canada Revenue Agency, it is very different from owing money to a regular creditor, but at the same time very similar. While a regular creditor can indeed take measures to collect the debt, the same measures taken by the CRA, CRA collections doesn’t need to follow the same route. A regular collections agency has to take certain steps before taking enforcement action against you, most notably obtaining a court order. CRA collections does not.

    That’s right; CRA collections can levy enforcement action, including freezing your bank account, garnishing your wages, even placing a lien on your home, without first acquiring court approval.

    Furthermore, they don’t need to make you aware of the enforcement action.

    Once CRA collections has taken enforcement action, the only way to have it removed (other than paying the debt in its entirety) is through a consumer proposal or bankruptcy.

    In a consumer proposal, a proposal is made to your creditors – in this case the CRA – based on a calculation of your debt, income and expenses. If the CRA accepts the proposal, you make a single monthly payment and interest is stopped. As soon as the consumer proposal is filed, enforcement action is stopped. In many cases, not only will the consumer proposal stop enforcement action and interest, it may also reduce the overall amount of your tax debt. Often repayment of a consumer proposal takes 5 years – a much longer period of time (and thus lower monthly payments) than the CRA would accept had you called to negotiate directly with them.

    In the case of a bankruptcy, the process is different. You do not make a proposal to the CRA. In a bankruptcy (first time), an income calculation is done and a reasonable monthly payment amount is established. Once filed, you will pay monthly for 9 or 21 months, depending on your income. Once you have completed the terms of the bankruptcy – paying monthly, disclosing all income, paying any surplus income, participating in credit counselling – you will receive your discharge and can begin rebuilding your credit. As with a consumer proposal, as soon as the CRA is notified of your bankruptcy, collection action will stop.

    While both a consumer proposal and bankruptcy are administered by a trustee in bankruptcy, we don’t recommend going directly to a bankruptcy trustee. The trustee is not your representative alone and anything disclosed to them will also be shared with the CRA. The best approach is to speak with a financial consultant first, one who can manage this process and can be trusted to keep your financial information confidential as you formulate a plan.

    At DebtCare, we can help you develop a strategy to protect yourself. Call us first: 1-888-890-0888.

     

  • 2017 Budgeting Tips: Planning for the Year Ahead

    Many Canadians start a new year with a resolution to get their finances in order. Creating and maintaining a budget is a great place to start. This week, we’ve got the 2017 budgeting tips that will help you build a plan and stick to it.

    2017 Budgeting Tips:

    The first step in creating a successful budget is to think about why you’re budgeting. If you’re creating a budget just because – because someone told you it’s a good idea, be it a family member or a financial success book – budgeting won’t work. The real purpose of budgeting is to indicate where your spending weaknesses are and provide the structure for you to get stronger in those areas. It also helps to have a goal in mind – this works as a great motivator when it comes to sticking to your budget.

    Step two is writing down what you earn – from all sources.

    Step three is likely the most difficult and will probably take the most time – write down all of your monthly spending. This means both regular and sporadic payments. Sometimes it helps to have the first month be your test month. It shouldn’t actually be a budget at all, it should instead reflect your spending in an average month. Then you can use that data to build an accurate, realistic budget.

    Take advantage of the various budgeting tools available – even if this means something as simple as a pencil and paper. Use such tools to keep track of spending to ensure you’re staying within your budget guidelines.

    Creating a budget can be a frustrating task. Staying on budget can be even harder. Once you’ve created your budget, it’s important to stick to it. Here are some 2017 budgeting tips to stick to that budget:

    • Use cash and only cash, for everything
    • Divvy up your weekly spending into envelopes or jars
    • Make sure you get and keep receipts
    • Share the responsibility with someone else

    If your budget shows nothing left at the end of the month to pay down debts above and beyond minimum payments, you may want to consider other solutions such as a debt consolidation or even a consumer proposal, depending on how bad your financial situation is. Minimum payments will never lead to you paying off your debts.

    At DebtCare, we can help you create a financial plan to pay down debt and move towards a more stable financial future, no matter your current situation.

    Call us today, we can help. 1-888-890-0888.