debtcare.ca

Author: mgoldenberg@debtcare.ca

  • CRA Auditing PayPal Business Recipients — What to Do If They Have Come After You

    Business owners, have you received income using PayPal? If so, the Canada Revenue Agency (CRA) may be contacting you for an audit.

    In November of 2017, PayPal was served with a Federal Court of Canada order to submit specific information to the CRA about PayPal Business account holders.

    PayPal had to give the CRA account details for businesses that sent or received payment via the service between January 1, 2014 and November 10, 2017.

    What does this mean for you?

    • If you’re a business that doesn’t use PayPal, you won’t be affected.
    • If you’re a business that has a PayPal Business account and used it for transactions between the above dates, you might be facing an audit.

    With the information from PayPal, the CRA is looking for business income that was not reported in annual filings.

    If you reported all of your income, including any from PayPal, and can prove it, then the audit would proceed as normal.

    But what if you received income via PayPal, but didn’t report it? That’s a different matter.

    If your business is audited and you know that you will owe, then you need to get a financial plan in place. Don’t ignore the problem!

    The CRA cares less about the fact that you didn’t report all of your income and more about closing their file. They can’t close their file if they don’t collect from you.

    If they can’t collect from you, they will turn to collection action – like a frozen bank account or issuing requirement to pay notices to your clients. This is why it’s best not to ignore the situation.

    Having a plan means putting measures in place to protect yourself once the debt is determined. One of the most important measures is figuring out how you will pay what you owe – or what you will do if you cannot pay.

    How to pay the CRA what you owe and stop collection action:

    • Pay the amount in full if you have the funds available.

    If you don’t have the funds available…

    In general, it is better to owe another financial agency than it is to owe the CRA. The CRA can take swift collection action with devastating consequences – and they are not required to give you notice.

    • If possible, consider taking out a loan to pay the CRA what you owe. Then pay back the other loan over a fixed schedule.
    • If you can’t take out a loan, can you refinance your mortgage?

    If you can’t take out a loan, refinance, or otherwise find the funds…

    • Negotiate with the CRA. In some cases, the CRA will agree to a payment schedule with you. However, this is a risky move and could further expose your business to collection action. And even in the best-case scenario, you will still owe the CRA – they will want their payment in full.
    • Part of their negotiation plan may still be to collect – such as sending out requirement to pay notices to business clients, which could harm your reputation.

    If negotiation isn’t viable…

    • File for a consumer proposal or bankruptcy.

    If you can’t pay in full, find the funds, or make an agreement, filing for insolvency will immediately stop CRA collection action. For many businesses, this is a far preferable alternative than having the CRA issue requirement to pay notices or freezing your bank account.

    The Bottom Line

    Whether your business is being audited by the CRA for a PayPal Business account or another reason, if you are found to owe and you can’t pay, you need a plan.

    Ignoring it won’t make the problem go away – and, in fact, will make it worse through collection action that can harm your finances and your reputation.

    When dealing with the CRA, it’s best to have an advocate on your side. At DebtCare Canada, we’ve helped thousands of Canadians deal with problem debt, including CRA tax debt. We offer access to one of the only programs that can resolve a CRA back tax problem.

    Contact us today to make a plan for your CRA business audit. Call 1-888-890-0888 or visit https://debtcare.ca/back-taxes/.

  • CRA Se Vuelven Más Agresivos En Su Manera de Cobrar.

    La Agencia de Ingresos de Canadá (CRA) siempre ha tenido una reputación de comportamiento de cobranza estricto y agresivo. Cuando se debe dinero, los agentes harán todo lo posible por recuperarlo. Esto generalmente resulta en un estrés extremo sobre el contribuyente y la acción de cumplimiento que puede causar estragos en su estabilidad financiera. Lo que es peor, esas tácticas parecen ser cada vez más agresivas. Si tienes duedas de impuestos  de la CRA, sigue leyendo.

     

    Cuando recibe una evaluación, quizás su pensamiento inicial es llamar y hablar directamente con la CRA. Cuando intente negociar con la CRA directamente, incluso antes de que hablen con usted, le pedirán que complete un formulario de divulgación financiera; este es un formulario muy peligroso. Querrán revelar todo, desde su cuenta bancaria a su empleador, a activos e ingresos y gastos. Es posible que ya tengan parte de esta información o que tengan los recursos para obtenerla, pero siempre es más fácil preguntarle.

     

    Recuerde, el objetivo de todos y cada uno de los agentes es obtener lo que se debe, lo antes posible. No están interesados ​​en negociar un acuerdo de pago largo y prolongado. Quizás asuma que permitirán un cronograma realista basado en sus ingresos. Ah, lo harán, pero se basará únicamente en sus ingresos: no se considerarán los requisitos para otros acreedores y su deuda con la CRA se convertirá en la máxima prioridad. Una vez que esto haya sucedido, tendrá pocos recursos. Dado que ha divulgado toda su información, donde realiza operaciones bancarias, trabaja, vive, etc., pueden iniciar acciones de ejecución contra usted. Esto puede incluir una cuenta bancaria congelada, embargo de salario, incluso un gravamen en su hogar. A diferencia de otros acreedores, no se necesita una orden judicial para la acción de cumplimiento de la CRA, y una vez impuesta puede ser muy difícil de eliminar.  Nuestro mejor consejo es este: si ha recibido un aviso de evaluación / reevaluación informándole de una deuda tributaria, no vaya directamente a la CRA. Debe considerar hablar con un especialista financiero para conocer todas las opciones disponibles para deshacerse de la deuda antes de que la CRA llame.

     

    Si la CRA ya ha tomado medidas de cumplimiento, existen programas del gobierno federal que pueden proteger su cuenta bancaria e ingresos. Hablar con un especialista financiero, nuevamente, es el mejor enfoque aquí. Podemos ayudarlo a aprovechar esos programas y deshacerse de la deuda tributaria de una vez por todas.

     

    Protégete a ti mismo y a tus bienes. En DebtCare, podemos ayudarlo a deshacerse de una deuda tributaria CRA y ayudarlo a mantener su equilibrio financiero. Llama a Zula al 1-877-296-0871.

     

  • Bankruptcy and Consumer Proposals Rise as Consumer Debt Reaches Record Limits

    Are you struggling with consumer debt? If so, you’re not alone.

    According to BNN Bloomberg, the average Canadian household owes $1.76 for $1 of annual disposable income. The same household devotes $0.15 of every disposable dollar to making principal and interest payments on debt, which is a record high.

    BNN Bloomberg also noted that when you add together consumer credit, mortgage, and non-mortgage debt, Canadians are carrying $2.28 trillion in credit market debt.

    What’s more, beyond just carrying debt, they’re paying the price. The number of insolvencies – bankruptcies and consumer proposals – filed by consumers in 2019 increased from the year before.

    While the numbers for the final quarter of 2019 have not been released yet, as of Q3 2019, Canadian insolvency filings were up to 34,708 — up more than 4,000 over Q3 2018. Of that, the number of bankruptcies rose slightly (from 13,549 to 13,757) and the number of consumer proposal filings rose substantially, going from 16,764 to 20,951.

    Why are more Canadians going into debt?

    According to a survey from Manulife, two in five Canadians believe they will never be debt-free.

    There are many reasons Canadians might currently be struggling with debt. Housing prices are continuing to rise, especially in larger cities like Toronto and Vancouver.

    While interest rates have stayed the same for the past year, the added spikes in 2017 and 2018 still didn’t help for those carrying debt. Some have also speculated that it’s too easy for Canadians to gain access to credit – and spend more than they can afford to pay back.

    For others, job insecurity can be part of it – not enough income to make ends meet. They might be facing job loss, working in a precarious employment situation (like the gig economy) with inconsistent income, or simply not earning enough to afford high housing prices.

    Poor credit habits can hurt your finances, too. While paying only the minimum balance on your credit cards can seem like a good idea, it can actually mean more debt in the long-term.

    Sometimes the moments leading up to major debt troubles are insidious. What can start as a seemingly harmless action can snowball into a much bigger problem.

    What exactly does struggling with debt look like? It could include:

    • Being unable to pay all your bills in full and on time each month.
    • Making only the minimum payments each month.
    • Being unable to make even the minimum payments.
    • Having more debt than income.
    • Always taking out another loan to pay off your old debts, getting into an unsustainable cycle.
    • Relying on credit to pay all your bills because you don’t have enough funds in your bank account.
    • Consistently being unable to afford the items you need to achieve a daily quality of life – pay for groceries, afford your rent, and so on.
    • Living paycheque to paycheque without knowing how you would afford an emergency.
    • And more…

    This might vary depending on your exact circumstances, but any of these could be a precursor to bigger problems down the road.

    How to deal with debt before major damage is done

    The sooner you realize you have a debt issue, the more likely you are to resolve it before major damage is done to your quality of living.

    When you file for insolvency, your credit score takes a big hit. While this is sometimes the best option, and it is possible to recover over time, if you tackle your finances early you minimize the need for this type of action.

    Some steps you can take to resolve problem debt include:

    • Creating a realistic budget and looking for ways to reduce your current expenses, then putting the savings towards paying off your debt.
    • Honestly assessing where your money is currently going and eliminating wasteful spending.
    • Practicing good financial habits, like always paying your bills on time and in full.
    • Not relying on credit. While some use of credit is good for your credit score, you don’t want to be using it because you don’t have the money elsewhere.
    • If you have an income problem, looking for ways to earn more – either through asking for a raise, finding a new job, or getting a part-time job.
    • Seeking out debt consolidation methods, such as mortgage refinancing.

    While filing for insolvency is one option, it’s not the only option – especially if you tackle the problem early.

    In 2020, make your resolution to figure out your finances for good. Debt freedom is possible with a little planning. There’s no point feeling bad about the circumstances that got you into debt. Instead, realize you’re not alone and focus on finding the way out.

    That’s where we come in. At DebtCare Canada, we will assess your situation and make recommendations to deal with debt. We’ll go over your options and create a realistic plan for success.

    Contact us today for a free consultation. Call 1-888-890-0888  or visit www.debtcare.ca.

  • 2020 Plan to Fix Your Credit and Finances

    The new year is around the corner. It’s the perfect time to make a plan to fix your credit, finances, and get out of debt for good!

    2020 isn’t only a new year — it’s also a new decade. Start the next 10 years off on the right financial footing with these tips.

    Here’s how to fix your credit and finances:

    1. Start by assessing your current state

    To set the right financial goals, you need to know where you’re currently standing.

    Find out:

    • How much income you earn each month.
    • How much total debt you carry — including interest rates.
    • How much you spend each month.
    • How much you save each month.
    • What your credit score

    From there, you can identify where there is room for improvement.

    Some of this data could be obvious. You might already know that you are carrying too much credit card debt, or you were denied a loan because your credit score is too low. But finding out your exact starting position will help you measure your results.

    1. Set SMART goals for the year ahead

    Once you know your current standing, you can now identify where you want to improve and change. But the way you set those goals can be equally important!

    It’s easy to set a goal like “Get out of debt by 2021,” or “Fix my credit score,” but these types of statements are often too vague.

    Instead, set SMART goals. SMART goals mean:

    S – specific

    M – measurable

    A – achievable

    R – realistic

    T – timely

    A SMART goal for fixing your credit might be: “Bring my credit score from 500 to 600 by 2021 by paying every bill in full and on time each month and starting credit counselling.”

    A SMART goal for getting out of debt might be: “I will pay off all my non-mortgage debt down to $0 by June 2020 by exploring debt consolidation options and finding savings in my budget each month.”

    1. Choose your strategies

    Your goals are only as strong as the strategies you use to achieve them. The right strategy can depend on your specific situation.

    For instance, if you want to fix your credit score, it will be much harder to achieve if you are carrying a lot of debt. Instead, you might look into getting out of debt first.

    To do that, you would consider debt consolidation strategies, such as:

    • Finding room in your budget and monthly income to pay off your debt.
    • Credit counselling.
    • A debt consolidation loan.
    • Refinancing your mortgage.
    • Filing for a consumer proposal.
    • Filing for bankruptcy.

    Each option has its pros and cons and the right one (or the right mix of options) will depend on your lifestyle!

    1. Seek support

    You don’t have to go after your financial goals alone. Accountability can be one of the most effective ways to set yourself up for long-term success.

    A debt counsellor is a great ally to have at your side. They will help build your strategy to reach your 2020 financial goals and beyond.

    They’ll identify where you should start, what steps you should take, when you should take them, the best mix of options for you, and more.

    Achieve all of your new year financial resolutions with DebtCare Canada. We’ve helped thousands of Canadians fix their credit and finances and we can help you, too!

    Contact us today for a free consultation to start your 2020 planning. Call 1-888-890-0888 or visit www.debtcare.ca.

  • Stick Handling Your Way Out of a Personal Finance Crisis [Mortgagenomics Canada Podcast Episode]

    What happens when you’re up to your neck with credit – or when your credit is maxed out?

    Michael Goldenberg, President of DebtCare Canada, participated in the Mortgagenomics Canada podcast, talking about solutions for dealing with debt.

     In the episode, you’ll discover:

    • What happens to your credit when you are behind in payments or your credit card is maxed out.
    • What happens to your mortgage qualification status if you file for a consumer proposal or for bankruptcy.
    • The best time to reach out for a debt consultation.
    • And more…

    Listen to episode 24, Stick handling your way out of a personal financial crisis, to hear Michael’s advice and solutions:

     

  • Happy Holidays from DebtCare Canada!

    Happy Holidays from the DebtCare Canada team!

    We wish you a wonderful season spent with family and loved ones, and a debt-free 2020!

  • Wage Garnishment 101 – Know Your Rights and Options

    If you’ve received a wage garnishment, you might be feeling scared and confused. You need to know how to stop it — and fast.

    But that’s not always easy to do. There are different types of wage garnishments — and each one has different options to deal with it.

    To stay protected and even stop wage garnishments, you need to know your rights and options.

    What is a Wage Garnishment?

    Collection agencies, the Canada Revenue Agency (CRA), and other government bodies use wage garnishments to collect money they claim a person owes. The garnishments come directly from your paycheque. If you own your own business, your clients might receive a requirement to pay notice instead.

    The garnishment takes a percentage of your regular paycheque to pay the debt owed. If you’ve received a wage garnishment, you’ll be bringing home a lot less income.

    Types of Wage Garnishments

    There are different types of wage garnishments. The type you are issued depends on the agency involved.

    The type of garnishment you receive can affect how much money comes off your paycheque, how you’re notified about the garnishment, what kinds of income are garnished, and more.

    These are the most common types of garnishments:

    1. Collection Agency/Creditor

    If you owe a debt to a creditor, like a credit card provider, they can get a court order to have your wages garnished.

    Under the Ontario Wages Act, a collection agency or credit can garnish up to 50% of a person’s wages. The exact amount depends on the situation and the organization collecting the debt.

    In most cases, wage garnishments in Ontario take 20% of a person’s paycheque.

    The good news about this type of wage garnishment is that you will see it coming. Because it involves a court order, the creditor will have to take you to court. This might still be overwhelming, but it gives you time to prepare and make a plan.

    A typical creditor cannot garnish social assistance income.

    1. Ontario Small Claims Court

    If you have gone to the Ontario Small Claims Court for another legal matter and now owe money, a wage garnishment might be ordered to collect the payment. These conditions will look similar to a garnishment from a creditor or collection agency.

    1. Canada Revenue Agency

    Unlike creditors, the Canada Revenue Agency (CRA) does not need a court order to garnish your wages. In fact, they don’t even have to tell you they are doing so.

    This can be a particularly difficult wage garnishment to deal with. CRA collections are swift, and in some cases, you might not even get a warning. They can simply send a letter to your employer, your bank, or the Income Security Program office.

    They can also garnish more types of income, including Canada Pension Plan and Old Age Security funds. There is no limit to the amount they can take.

    This is why you should always take owing money to the CRA seriously.

    1. Family Responsibility Office (FRO)

    The Family Responsibility Office (FRO) deals with child support and spousal support payments. If you owe support money, there will be swift consequences.

    Not only can FRO garnish your paycheque, but they can also take other income, including sales commissions, Employment Insurance (EI), Workers’ Compensation, income tax refunds, severance pay, and pensions. Beyond that, they can take money from your bank account, register liens, and even suspend driver’s licenses and cancel passports.

    FRO can deduct up to 50% of any income-type funds, including EI and CPP, and 100% of tax refunds and interest on Bank of Canada savings bonds. If you have a bank account in your name only, FRO can take 100% of the amount owing to pay arrears.

    1. Canada Student Loans

    If you miss payments on your Canada Student Loan for 270 days (nine months) or more, your loan goes into default and is sent to the CRA for collection. The CRA can then proceed with their usual collection action.

    How to Stop Wage Garnishments

    Stopping a wage garnishment depends on the agency and type of debt. In every case, paying off the debt owed will stop your wage garnishment immediately. If you can’t pay, there are other options.

    • Consider debt consolidation to free up funds to pay what you owe.
    • Negotiate a voluntary arrangement with a creditor if possible. This may be harder to do if they already have a court order for the payment in full.
    • Go to court and petition to stop the collection action. This can be expensive and isn’t guaranteed, especially if it’s from a court order.
    • Work with a debt counsellor to file for bankruptcy or a consumer proposal. This will immediately stop most collection action, but there are exceptions.

    Exceptions

    • You can’t stop FRO payments by filing for bankruptcy.
    • You can’t include student loans in a consumer proposal or bankruptcy for the first seven years after finishing your studies.

    While getting a wage garnishment is overwhelming, a good debt counsellor will cut through the confusion. They will assess your situation, type of garnishment, rights, and options to find the right solution for you.

    If you’re dealing with a wage garnishment, contact DebtCare Canada today. Call 1-888-890-0888 or visit www.debtcare.ca.

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  • Holiday Financial Planning… Steps to Start 2020 on a Strong Financial Footing

    The holiday season is an expensive time for many! Between gifts, decorations, parties, and travel, the costs (and credit card charges) can quickly add up. To keep your budget and debt in check, holiday financial planning is a must.

    According to PwC Canada, the average Canadian consumer will spend $1,593 during the 2019 season — up 1.9% from 2018. That number increases with the type of shopping consumers choose to do. The average online-only shopper plans to spend $1,053 while the average multi-channel shopper (in-store and online) plans to spend $1,726.

    And that is just on shopping costs alone. This doesn’t factor in travel expenses, décor, food, and beyond.

    Overall, PwC reports, 17% of Canadian consumers are worried about credit card debt. Millennials and Gen Z are even more concerned: 22% and 24% respectively think too much debt might build up.

    Going into the new year with debt — especially high-interest credit card debt — is stressful. You need a plan to pay off your holiday purchases and leave 2019 on better financial footing than you started the year with!

    Holiday financial planning is the key to both preventing overspending during the holidays and making 2020 your most successful financial year yet. Here’s how to go about it.

    Assess Your Budget

    A budget is important for planning your holiday spending. Knowing how much you can afford to spend will help determine what you spend it on!

    • If you have a regular monthly budget, review how much you can realistically set aside for your holiday expenses.
    • If you don’t have a regular monthly budget, review your past month of spending. How much income have you brought in and what savings are left over?
    • Are there any areas in your budget or spending habits you could trim back on for your holiday spending?
    • Decide on the figure you are comfortable spending this season and that you are able to comfortably repay into 2020.

    Plan Your Holiday Spend

    • Make a list of everyone you are shopping for, food-related items, decorations, travel plans, and other expenses you will encounter this season.
    • Estimate how much you plan to spend per list item. Even just the act of doing this can be illuminating!
    • At this point you may see that you have planned for more than is in your budget estimate.

    If you’ve found that you plan to spend more than you can afford, you can try to either reduce what you plan to spend (looking for ways to save money) or you can go back to your budget and look for more wiggle room. To that end…

    Clean Up Your Debt

    One of the biggest hijackers of your budget is debt payments. If you owe money, you know just how much the interest payments alone can take out of your monthly budget. And even if it’s only a little bit, why not use that money for something else?

    Consolidating your debt can free up room in your budget for holiday spending and start you on the right financial footing for the new year. If “get out of debt” is your New Year’s resolution, you’ll already be a step ahead.

    Don’t Finance Your Holiday Spending 

    If you’ve found that you plan to spend more than you have, you might be tempted to make up the difference with financing — credit cards, lines of interest, a payday loan, and so on.

    Don’t do this! If you don’t have the income available now or won’t be able to pay off the expenses in full in the next month, it can create a stressful financial future. While you might profit in the short-term, you’ll have to make up the difference in the long-term. This can lead to lingering debt and credit score issues that you’ll still be trying to fix next holiday season.

    Instead, look for ways to make the holidays great on a budget. Your financial future will thank you!

    DebtCare Canada helps our clients with holiday financial planning, debt consolidation, budget planning, money saving, and more.

    Contact us for a free consultation to set yourself for success during the holidays and beyond. Call 1-888-890-0888 or visit www.debtcare.ca.