debtcare.ca

Author: mgoldenberg@debtcare.ca

  • CRA Wage Garnishments – What You Need to Know

    cra wage garnishments dcA few weeks ago we dedicated a blog to Canada Revenue Agency tax problems and how to approach a tax debt before attempting to make a payment arrangement. This week we follow that up with a discussion of what to do once the CRA has levied enforcement action against you, specifically in reference to a wage garnishment. CRA wage garnishments are terrible to have to deal with, and unless you face the problem head-on, you might be in for a struggle financially.

    What kind of struggle are we talking about? The CRA can garnish a significant portion of your income depending on its source. Here are a few examples:

    • CRA wage garnishments to employment income = up to 50%
    • CRA garnishments to pension income = up to 100%
    • CRA garnishments to subcontractors = up to 100%
    • CRA garnishments to companies = up to 100% of gross income

    In addition to issuing no warning prior to garnishing your wages or income, the CRA doesn’t need a court order to issue a garnishment. They simply need to send a notice to your employer/clients and the funds will be taken directly from your income.

    Once a wage garnishment is in place, getting the CRA to remove it is incredibly difficult.

    So, what can you do?

    A consumer proposal is one option for getting rid of a CRA wage garnishment. Once a proposal is in place, the CRA has to remove the garnishment as soon as notification of the proposal is received. Furthermore, a consumer proposal may even reduce the size of your tax debt – a consumer proposal or bankruptcy is the only way to reduce a principal tax debt – and stop interest from accumulating. A consumer proposal will also get rid of your multiple monthly payments, merging all into one, for a far more manageable payment.

    Just remember, don’t go directly to a trustee to negotiate your proposal. While a trustee will represent you, they will also represent the CRA which won’t always mean the best deal for you. Instead, speak with a financial consultant first. A professional financial consultant can facilitate your proposal, negotiate it with the trustee and represent your interests – both protecting your information and getting you the best, most fair, deal.

    At DebtCare, we will stand beside you throughout the entire process. We have years of experience dealing with both CRA wage garnishments and negotiating consumer proposals.

    You can count on us. Call us today 1-888-890-0888.

     

     

  • Dealing with Holiday Debt in 1-2-3

    The holiday season is officially behind us and that means kids are back at school, the parties are over, and the decorations have been taken down. It also means that the holiday bills are on their way if they haven’t already arrived. We all want to give our families a great holiday, and often that means shelling out a significant amount of money on gifts and food and everything else required for the perfect holiday, but this desire can also result in significant financial stress. Today we talk dealing with holiday debt.

    When ready cash is unavailable, many families turn to their credit to manage shortfalls over the holidays. This can result in an endless stream of credit card bills come January – credit card bills that can quickly become difficult to handle, especially when you consider the rate at which interest accumulates, particularly when you’re only making minimum payments.

    Thinking about how you will get on top of all these bills? Here are some consolidation options that can help when it comes to dealing with holiday debt:

    • A loan. If you have good credit, a loan can help to merge all of those high interest debts into one, manageable monthly payment. However, if you have bruised credit or a great deal of debt, a loan will be difficult to obtain and thus may not be the best option. Additionally, if a loan is on the table even with bruised credit or a mountain of debt, you may be looking at an interest rate of 20-30%, which may be even higher than the ones you currently have.
    • Refinancing your home. If you have equity in your home, refinancing your home can be a great choice for dealing with holiday debt. Refinancing your home will often result in lower interest rates and more flexible repayment terms.
    • Government programs. There are programs made available by the government to help reduce debt and consolidate those numerous payments into one single payment. These programs will also mean freezing interest. The ability to take advantage of these programs largely depends on your personal financial circumstances and reasonable ability to repay your debt.
    • An example of a government program is a consumer proposal. A consumer proposal is an intelligent method for dealing with holiday debt. A consumer proposal involves filing a proposal with all of your creditors, who then need to accept it. Once accepted, your debt may be reduced and all payments are combined into one monthly payment.

    Prior to making a decision, the best approach is to have a financial assessment completed by a financial consultant who can look at your finances and help to arrange the most effective option.

    Don’t let the thought of dealing with holiday debt keep you from making plans for the new year.

    Call DebtCare today at 1-888-890-0888 – we can help.

     

  • Tax Problem Tips – Is the CRA Friend or Foe?

    The tax season is just a few short months away, and that means, Canadians are getting ready to break out the calculators. If you’re on top of your taxes, a few days of hassle are quickly followed by a year of not worrying. However, if you owe a tax debt, or are nervous that one will be hanging over your head once you’ve filed, that year of not worrying may seem like a pipedream. This week we’ve got some tax problem tips to help you better deal with any issues.

    First of all, it is important to note that the Canada Revenue Agency is not in your corner. No matter how nice the agent assigned to your case may seem, they are not your friend. When you call to settle a tax debt, hoping for some mercy, the agent may at first seem sympathetic, but don’t be fooled.

    The first thing they will likely do is tell you that they will consider an arrangement with you once you’ve completed a financial disclosure form. This is a dangerous CRA form that requires information about your income, expenses, assets and liabilities. It will also ask you to provide information about where you work, live and bank. Often people will complete this form in good faith, assuming that once the CRA understands how much money you take in each month, compared to your current financial responsibilities, they will accept an arrangement based on what you can reasonably pay.

    This could not be further from the truth.

    What most Canadians don’t know is that the CRA will only consider your basic living expenses after seeing your budget and disallow payments to other things like credit cards. They will decide, based only on those basic living expenses, what you should have left over and often request a monthly payment so high that it will be impossible to pay.

    Additionally, sometimes they will accept your arrangement temporarily. The CRA is not looking for a long-term arrangement, and thus once your arrangement ends or if they deny you an arrangement, they will use all of the personal information you disclosed in the financial disclosure form against you! Then they will resort to collection action, including garnishing your wages, placing a lien on your home, or freezing bank accounts, to get what is owed.

    Before you complete one of these dangerous CRA forms or consider trying to negotiate with the CRA – have an independent review of your finances done by an independent financial consultant, hired by you to get an opinion as to your next best steps. Not only will they be able to help you anticipate what steps the CRA will take, they can also help you come up with a financial plan to deal with the tax debt so that you don’t get yourself into deeper trouble with CRA.

    Protect yourself. Call DebtCare first. 1-888-890-0888.

     

  • How to Choose the Right Ontario Mortgage Broker

    real-estate-sales-professional-smIf you are considering buying a home or want to refinance, you may be wondering which route is the best to take to obtain financing. Today we talk about mortgage brokers and how to choose the right one to best suit your needs.

    Often, when individuals set out to obtain mortgage financing, their first thought is to head to the bank. While this is a good option for some, going to a mortgage broker is often better than going directly to the bank or a lender because it gives you more choices. This is because banks are only able to offer you their rates, while a broker working with multiple lenders can offer a variety. That being said, it is critical to take steps to choose the right broker for you.

    Many mortgage brokers have an inherent conflict of interest because, over time, relationships are built with lenders that can lead brokers to find you a deal that makes the most sense for them. While the deal may be good, it won’t necessarily be the best. Furthermore, like the banks, some brokers only represent certain lenders, making it difficult to provide options for those with bruised credit or in atypical situations.

    So, how do you choose the right Ontario mortgage broker?

    Start by heading online to see what options are available locally. Once you’ve narrowed down a list, check the FSCO website to confirm that they are licensed and in good standing. If they are not, our advice is to steer clear.

    Follow up by Googling them and checking their reviews. Are there reviews of their brokerage? Have people recommended them online? Do they have presences on social media? How many followers do they have? Are people saying good things about them online? The answers to these questions can yield a great deal of insight into whether or not they are trustworthy and reliable.

    Ask them for references or to verify testimonials. A good mortgage broker will be able to provide you with references to previous clients.

    Once you’ve settled on a few, call and ask questions. Take notes on what deals they are able to offer you. Make sure to ask about special conditions. If you don’t understand something – such as terms used or calculations – be sure to ask for clarification.

    A mortgage is a very important financial product – one that you will likely have for years to come. You don’t want to rush into it. Be sure to do your research and find the right mortgage broker for you.

    Want more information on how to choose the best Ontario mortgage broker for your unique situation?

    Call DebtCare today: 1-888-890-0888.

     

     

  • Best Wishes from the DebtCare Team

    May every happiness greet you this holiday season!

    We hope your days are filled with laughter and love,

    good tidings and great friendship.

    The DebtCare team wishes you Happy Holidays and all the best for 2017!

  • Going Debt Free: Consumer Proposals in 1-2-3

    A consumer proposal is a legal avenue for dealing with debt. Over the last few years, this has become a very popular option for Canadians looking to deal with financial challenges. Today, in an effort to help you better understand this option, we get back to the basics with consumer proposals. Read on to learn more.

    Firstly, what exactly is a consumer proposal? It starts with a proposal to your creditors based on an amount that you can reasonably pay back. This amount is based on a trustee’s assessment of your financial information.

    The majority of your creditors must accept the proposal, and proposals have a very high success rate if structured properly. If accepted, you then begin to make single, monthly payments to a trustee for a term of 4-5 years. As soon as the proposal is filed, any enforcement action against you will be stopped, interest stops and often the proposal will involve you repaying less money to your creditors than the total debt initially owed.

    While the term of the proposal may be 4-5 years, the consumer proposal can actually be paid in full at any time. This is a great benefit. Over time, many individuals experience financial positioning changes and once paid in full the consumer proposal will be removed from your credit in 3 years which means that you can rebuild quickly. This is important, as a consumer proposal will negatively impact your credit. However, if you’ve decided that a proposal is the best course of action to deal with your debts, your credit has likely already taken a hit.

    Who can administer a consumer proposal? Only a trustee in bankruptcy has the ability to file a consumer proposal. That being said, while it must be administered by a trustee, most people negotiate their consumer proposals through an independent financial consultant. Why? Because in a proposal the trustee represents both you and your creditors – so their role is to get your creditors as much money as possible in the proposal. Seems like a bit of a conflict of interest, no? We agree, especially because the trustee makes a percentage of whatever the settlement is – the more you pay, the more the trustee gets paid. That’s why we suggest seeking out your own independent advice before speaking with a trustee.

    At DebtCare, we can offer the advice you need to best protect yourself in a consumer proposal. Have questions or want to find out more about the benefits or get started?

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

     

  • How to Stop a CRA Wage Garnishment Before the Holidays

    The Canada Revenue Agency (CRA) does not take a break during the holidays. If you owea tax debt and have not yet made arrangements to pay the debt, don’t think you’re safe from enforcement action just because it’s the “most wonderful time of the year.” The CRA is aggressive and to them it matters little if it’s May or December. To help you out, today we cover how to stop a wage garnishment before the holidays.

    Whether the CRA has already levied a wage garnishment or you are concerned that one may be headed your way, here are some things you need to know.

    Firstly, the CRA can garnish up to 50% of employment income and up to 100% of other types of income, such as your pension. Additionally, unlike other creditors, they do not need a court order to do so; they simply send a notice to your employer and your employer is legally obliged to comply.

    Think you’ll have fair warning? Think again. The CRA does not need to provide you with notice of an upcoming wage garnishment.

    Once a wage garnishment is in place, the CRA becomes even more difficult to negotiate with.  So, knowing this, what are your options?

    Obviously the best option is to pay the tax debt. After all, the whole point of a CRA wage garnishment is to obtain the funds owed by you.

    If you can’t pay the debt, you may consider heading to tax court. Keep in mind that this is a very expensive option and the success rates are quite low. You will also need to retain the services of a lawyer and could be looking at several months before your case is heard.

    Another option is a consumer proposal. This is a negotiated settlement with your creditors (the CRA included) that stops the garnishment as soon as it is filed. It also stops interest and may reduce the total debt load that you are currently carrying. Like a consumer proposal, bankruptcy is another option to stop a CRA wage garnishment. Both of these need to be arranged by a trustee in bankruptcy, but be sure to acquire your own representation rather than going directly to a trustee.

    If you own your own home, refinancing may be another viable option to pay the tax debt. This will often reduce the amount of interest you are paying and will stop a garnishment. You will need to have decent credit though.

    All of the above are good options for dealing with a CRA wage garnishment. Which option is right for you? The best way to determine that is to speak with a financial consultant who knows about CRA tax debts and has the resources to help you negotiate.

    Want to see that wage garnishment lifted? Call DebtCare today at 1-888-890-0888.

     

     

     

     

  • Debt Consolidation Before or After the Holidays: When is the Right Time to Consolidate?

    shutterstock_524105263-1The holidays are fast approaching, and for many Canadian families, that means several weeks of juggling finances and using credit to finance holiday spending. This usually leads to financial stress, which can really put a damper on the seasonal festivities. This year, get a head start with a debt consolidation.

    When is the right time to consolidate? It is always best to start the New Year on fresh footing. If 2016 was a year where you accumulated a lot of debt, there are solutions – these solutions vary depending on the amount of debt you have and your personal circumstances. Know that any number of these solutions can help you deal with that stress from holiday spending.

    What options are available?

    Many people choose to use their home equity to refinance a first mortgage or take out a second mortgage to consolidate debt. This can provide a low monthly payment and involve interest rates far lower than what you are likely paying for credit cards. This is a very viable option that won’t have an overall negative impact on your credit score.

    What if you don’t have a home, or own a home but have no equity and are struggling to manage your payments? Or, what if you don’t have the credit necessary to obtain a traditional loan from a financial institution for a regular debt consolidation?

    Another option to consolidate debt is a consumer proposal. While a consumer proposal is not a traditional debt consolidation and does badly impact your credit score, it does involve a single, monthly payment that covers all of your debts (excluding your mortgage).

    In a consumer proposal, a settlement is negotiated with your creditors. If the majority of your creditors accept the settlement, there are many benefits:

    • A single, monthly payment and prefixed repayment term
    • Interest stops
    • In many cases your debt is reduced and your monthly payment is far less than what you were paying to your creditors
    • If your creditors have commenced enforcement action against you, such as freezing your bank account or garnishing your wages – this action will stop as soon as the proposal has been signed

    It can be difficult when facing financial challenges to know the right solution. A debt consolidation – whether through traditional channels or through a consumer proposal – is a great way to get things sorted out.

    The best thing you can do is work with a financial consultant who is independent and represents you. They can look at all of your financial information, present options and negotiate the solution that best suits your unique situation.

    At DebtCare, we can sit with you and discuss all of your options. Don’t let holiday spending stress you out. Get your finances figured out before the New Year and start 2017 off on the right foot.

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

     

  • Holiday Budget Planning: Tips to Keep The Season Cheerful

    holiday-budget-planningSo many of us are guilty of overspending during the holidays; the gifts, the outfits, the events, the food. All of this spending can quickly spiral out of control, turning what should be a joyous season into a stressful one. This is especially true if we start early and don’t keep track of what we’ve purchased. This year, keep the stress at bay with these holiday budget planning tips.

    Set a budget – and stick to it! This should always be the first order of business. Take a realistic look at your bank account and set a total that you can spend without setting yourself up for a massive bill once the holidays are over. Set an amount for each person you need to buy for and stick to it.

    A great way to do this is with the envelope system. Once you’ve set an amount, put that amount in an envelope with the receiver’s name on it. Once the envelope is empty, that person is done.

    Keep a list. All too often we buy, assume we are finished, and then see ‘that perfect gift’ that so-and-so just can’t live without. Trust us, they can. Keep a list of what you’ve purchased for each person, and consult it when you’re wondering if you have ‘enough’.

    Go DIY. Personal, hand-made items are often far more special than something purchased from a store. Take advantage of the countless boards on Pinterest and make some gifts. Just be careful, some DIY gifts are actually pretty costly, so just price out the items before diving in.

    Host a potluck. It isn’t just the gift giving that adds up around the holidays. Hosting a big party and providing food for all of your guests can get pretty costly. This year, instead of handling all of the food yourself, ask guests to bring their favourite holiday dish. This not only spreads the spending around, it may just open your eyes to new recipes to add to your cookbook!

    Start saving now for next year. Now is the time to start thinking about saving up for next year. Once the holidays end, start putting away even just a few dollars a week – once next November rolls around, you’ll have an impressive little nest egg from which to draw.

    Have a plan to deal with holiday debt. If you know that, no matter what you do, your budget won’t be able to handle the extra spending, and your credit will take a major hit, have a plan in place to deal with the debt.  Get in touch with a financial specialist to discuss all of the options available to you and get ready to start 2017 off on fresh financial footing.

    At DebtCare, we know how tough the holidays can be when money is a concern. Let us help.

    Get in touch today to find out about strategies to deal with debt before it gets any worse. 1-888-890-0888.