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  • Wages Garnished by CRA – Blog Series Part 1

    Wages Garnished by CRA – Blog Series Part 1

    Wages Garnished by CRAWage Garnishment Blog Series Part 1 – Wages Garnished by CRA

    With the advent of May, the personal tax filing deadline is now well behind us, and for many, a sigh of relief can be had. For others however, the passing of the deadline brings with it a whole new set of issues.

    If, after filing your taxes, you find yourself with a tax debt that has led to your wages garnished by CRA (the Canada Revenue Agency), this first blog in our wage garnishment blog series might be a smart place to start as far as finding relief.

    If you have yet to have your wages garnished by CRA, but are concerned that this might be a reality in the very near future, here are some things to think about:

    • If you are an employee on payroll with taxes deducted at the source, the CRA can garnish up to 50% of your wages. They simply need to send notice to your employer and your employer is legally required to submit a portion of your pay to them to pay off your tax debt.
    • If you are a sub-contractor, or receive a different form of income, such as a pension, the CRA can garnish up to 100%.
    • If you are self-employed, the CRA will send a notice to your customers to redirect your receivables directly to the CRA.
    • A court order is not required for wage garnishments initiated by the CRA.
    • If the person who receives the requirement to garnish your wages does not comply, the CRA can then pursue them (so don’t assume that just because your employer likes you that they will ignore a requirement to pay).

    How does the CRA know where to turn to garnish your wages?

    There are a number of different sources, including the T4 filed by your employer, an audit done on a client or supplier, a call to the CRA tip line, or personal disclosure.

    A garnishment can cause serious financial hardship, not to mention embarrassment or negative impacts to your personal business. Knowing this, what can you do to prepare yourself, or deal with a wage garnishment by CRA that is already in place?

    Remember that dealing directly with the CRA is never a good idea – unless you can pay the debt in full, your chances of getting an agent to even entertain a reasonable payment plan are slim to none.

    And, if you attempt to deal with them directly, providing additional information in the hopes of reaching an amicable agreement, a frozen bank account or property lien may be the only result.

    There are programs that offer immediate protection. Are your wages garnished by CRA? These programs also offer protection from other enforcement action, and finding out about these is the best place to start. If you are facing a tax debt or a CRA wage garnishment, DebtCare can help. Call us today at 1-888-890-0888.

  • Tax Return Going to Result in Tax Debt? What Can You Do If You Can’t Pay

    Tax DebtThe tax deadline is upon us, and for many this means a necessary hassle we must face annually – but once dealt with, is quickly relegated to the back of our minds until this time next year. For others however, those with a tax debt looming over their heads, tax time brings with it some serious stressors.

    As we hope you are aware, the tax deadline this year for personal income tax returns is April 30th. If you have everything in before this date, that’s great, especially if you don’t owe anything. However, if you have yet to file, and think you might owe, it might be prudent to consider the late filing penalties and how they can impact your tax debt – it might just be enough to motivate you to get your filing done.

    2013 late filing penalties:

    • If you owe for 2013, and do not file by April 30th, you will be charged a late filing penalty of 5% of your 2013 balance, plus 1% of the balance owing for each full month your return is late (to a maximum of 12 months).
    • If you were charged a late filing penalty for 2010, 2011, or 2012, your late filing penalty can increase to 10% of your 2013 balance, plus 2% of the balance for each full month (to a maximum of 20 months).

    These penalties are steep – and no one wants to get saddled with a major tax debt, plus interest – but what if you can’t pay? If you are thinking about just ignoring that debt, hoping that by not filing the CRA won’t catch on and you’ll be spared the financial strain – think again. The consequences of not filing may mean a notional assessment, where the CRA will estimate your annual income and charge you what they feel you owe based on their findings. Continued failure to pay a tax debt can result in enforcement action, including wage garnishments, frozen bank accounts, even property liens.

    So what can you do? If you have filed and owe, or if you have yet to file because you are afraid that you will owe, know that you have options. Don’t ignore that tax debt in the hope that it will go away. Speak to a debt solutions specialist to find out about all of the options available to you to get rid of that tax debt once and for all.

    For more information about dealing with a tax debt please contact DebtCare Canada today by calling 1-888-890-0888.

  • DebtCare Canada Weighs In: Student Debt

    Student LoanIt is very common nowadays to hear about 20 something individuals living with parents, or struggling to meet their financial responsibilities, especially when compared to 20 years ago – and as a recent Yahoo Canada article points out, much of this has to do with the rising costs of university education and the resulting student debt levels. This, coupled with the less than promising job market, has left many young Canadians facing significant challenges when it comes to their life plans.

    Our very own Michael Goldenberg, President of DebtCare Canada, was interviewed for the article, and had this to say: “Increasing debt and no plan to pay it off is a common problem among young Canadians, known as Gen Y or Millenials.”And it isn’t just student debt that is getting these individuals into trouble – as Michael states, “the extreme accessibility to credit that helps fuel the need for instant gratification” is also causing major financial problems for young Canadians when it comes to establishing themselves financially and saving for the future.

    Are young Canadians out of luck then when it comes to getting things straightened out? No, there are options available – it just requires discussing those options and choosing the one that best fits the situation.

    Check out the full article here: http://ca.news.yahoo.com/challenges-facing-young-canadians-throw-life-plans-curve-184000091.html

    Whether you are dealing with student debt, credit card debt, or a combination of the two, DebtCare Canada can help you get the relief you need to start over on fresh financial footing. Contact us today by calling 1-888-890-0888.

  • Ontario Bankruptcy Trustees – What is Their Role in a Consumer Proposal?

    Ontario Bankruptcy TrusteeWhen you feel as though you are drowning in debt, with few options available for relief, you may be considering a consumer proposal as a way to get those collection agencies off your back and to obtain some semblance of financial stability. Knowing this, perhaps you are thinking about seeking the advice or assistance of an Ontario bankruptcy trustee.

    Wait – before you enlist the services of a bankruptcy trustee, you should first know what role they play in a consumer proposal and how this can impact you.

    A bankruptcy trustee in Ontario is an individual licensed by the Superintendent of Bankruptcy. Their job is to administer consumer proposals and bankruptcies and to manage assets held in trust. They will negotiate the settlement between you and your creditors. In a proposal, that trustee will assist you in developing a proposal to present to your creditors (usually a percentage of what you owe them), and once accepted, monthly payments are made through the trustee, and the trustee transfers that money to your creditors.

    Sure, this all sounds well and good – after all, you can’t make a consumer proposal without a trustee – it is a legal agreement under the Bankruptcy and Insolvency Act and must be administered following a formal and regulated process. That being said, there are a few important things to keep in mind before you make the call to a trustee.

    Firstly, a bankruptcy trustee does not simply act on your behalf. Even though you are the one to call, this individual represents both parties (you and your creditors), not just you. This means that they are obligated to seek the most money possible for your creditors to ensure that they get as much of what they are owed as possible, while still being fair to you. What this means is that you may not necessarily be getting the best deal.

    Secondly, most bankruptcy trustees never outline how they are paid – but this is important. Although their fees are regulated, they are paid according to how much you pay to your creditors, and thus it is in their best interest to get as much money for your creditors as possible.

    So, what then are your options? Accept this and go forward? Skip the proposal all together to avoid it? No, there are ways to protect yourself and secure a consumer proposal that meets your needs. The best way to do this is to work with a financial organization experienced with debt relief solutions, one that can offer you representation and protect you throughout the entire proposal process. These professionals can walk you through the process, ensuring that you are aware of and understand your choices, as well as administer your paperwork.

    Know before you go: before you call that trustee, think about getting personal representation – someone who will look out for your best interests rather than their own or that of your creditors. DebtCare Canada can help – call us today at 1-888-890-0888.

  • CBC News Report: Payday Loan Interest

    Payday LoanAs a debt solutions organization, we often have clients come in and talk about problematic payday loans and how they continue to struggle with meeting the repayment requirements. When it comes to payday loans, we always try and suggest other forms of financial relief – and a recent CBC News report demonstrates clearly why we might do so.

    The report, released earlier this year, examines the case of a B.C. payday lender who was ordered to repay over $1 million to customers after charging up to 35% interest.

    By law, payday loan lenders cannot charge more than 23% interest per month. And sure, this may seem like a fair deal, the existence of a cap on how much lenders can charge, but 23% is still a whopper when it comes to the end amount that you are paying to borrow a few hundred dollars!

    Check out the full article here: http://ca.finance.yahoo.com/news/cash-store-ordered-pay-1m-illegal-payday-loans-152335287.html

    Payday loans are never a good idea, and should be avoided at all costs – not only because of the exorbitant interest rates, but also because they become increasingly difficult to pay off.

    Don’t let a payday loan interest cap fool you – there are many other options as far as financial relief. Contact DebtCare Canada today for more information: 1-888-890-0888.

  • Tax Deadline – Have a Plan if You Cannot Pay Before the CRA Knows It

    Tax DeadlineThe tax deadline is fast approaching – the deadline to file your 2013 return, as always, is April 30th – are you ready? Getting your returns in order and filing on time can sometimes be an annual hassle, but it can’t be avoided. Filing online is growing in popularity, and can be done from the comfort of your own home. But what if you miss the deadline – what are the consequences of this?

    If filing taxes seems like a hassle, then dealing with the consequences of missing the tax deadline can seem like a nightmare, especially if you owe. Missing the deadline when you are owed money just means waiting longer to receive it (why would anyone want to do that?), but when you owe money, the Canada Revenue Agency (CRA) won’t wait – and that tax debt will just continue to grow the longer you wait to pay it.

    What are we talking about here? When you owe a tax debt, interest and penalties accumulate at an alarming rate, to the tune of 5% of the total tax debt plus 1% monthly for up to 12 months. Additionally, if you filed late in previous years, your penalty can increase to 10% of the total tax debt plus 2% monthly for up to 20 months. These additional charges are significant, and left unpaid can grow to become larger than the total debt you originally owed.

    Interest and penalties are not the only things that contribute to your tax debt becoming seriously problematic. Once the CRA knows that you owe, they can get pretty aggressive in their attempts to gather the money. Good cop, bad cop tactics to obtain your personal information, collection calls, and enforcement action (wage garnishments, frozen bank accounts) are all realistic and costly outcomes of a missed deadline and failure to pay.

    So, knowing all of this, how can you avoid the irksome effects? If you know that you are going to end up owing money to the CRA it is a smart idea to have a plan in place before they learn about it. Firstly, if you have the ability to pay the debt in full upon filing, great – do that. This will solve the problem before it starts and leave you in a fresh financial position tax-wise. However, if you don’t think you can pay the debt in full, getting a plan in place to do so is a very smart idea.

    For more information about avoiding the consequences of a missed tax deadline please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca

  • Realistic Debt Solutions – What Are Your Options?

    Being in debt can be a drag – but there are options available. However, before making any decisions about which route to take it is always a good idea to understand what each of the various debt solutions entails. Check out our chart to find out the main differences between the 4 most popular debt solutions out there.

    DebtCare Chart

    For more information about any of these debt solutions or to get a plan started please contact DebtCare Canada by calling 1 (888) 890-0888.

  • What to Do When CRA Collections Get Aggressive

    What to Do When CRA Collections Get Aggressive

    CRA CollectionsTax time is just around the corner, and for many Canadians this is just another item on the to-do list that takes a bit of time. For others however, tax time can be incredibly stressful, especially if you owe, or are going to owe, money. Once the Canada Revenue Agency (CRA) finds out about this debt, collection agents can get pretty aggressive – so how can you deal with this? Here are some tips on how to protect yourself when CRA collections come calling.

    Firstly, if a debt is owed to the CRA, and you have the ability to do so, pay it off completely. Once you are paid up, collection calls will cease and you will no longer have to worry about it.

    However, if you are not in a financial position to pay off the debt, other arrangements will be required. In this case, the CRA will often start out with a friendly call in an attempt to obtain your personal information and to create a monthly payment plan. At the beginning this may not seem too bad, but keep in mind this can end up hurting you in the end. As a result of your giving information freely, the CRA now has the ability to commence enforcement action (freeze your bank account, etc.) when you cannot meet their strict and unmanageable payment requirements (the CRA will not accept extended payment plans and interest continues to accumulate).

    If you refuse to give your personal information freely, this is when the situation can turn very ugly, very quickly. That ‘friendly’ CRA agent likely won’t seem so friendly anymore, and when collection calls begin it can be difficult to get them to stop. At this point, since a debt is owed, the CRA may initiate enforcement action, including garnishing your wages or placing a lien on your property.

    Negotiating directly with the CRA is not the best idea. However, paying the debt is – and therefore that should be your very first consideration. Certain avenues exist that may help you to rid yourself of those troublesome and concerning collection calls. Depending on the size of your tax debt, some of the options available may include a consumer proposal or debt consolidation.

    As mentioned, if you have the ability to pay a tax debt completely, do so. This will end up saving you not only interest, but the stress that accompanies this type of financial problem.

    For more information about how to deal with CRA collections, please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at www.debtcare.ca

  • March Break Madness – Don’t Rack Up That Credit Card Debt

    Credit Card DebtHey parents: March Break is right around the corner, and for many Canadians with kids this can mean a week filled with activity and outings. And these outings can often become huge expenditures. When you are already in credit card debt up to your eyeballs, these costs are all that much more troublesome. This year, skip the costly jaunts and daytrips and opt for something a little less expensive.

    Simple Saving Tip #1: Get crafty at home. If you are creative, this can be a great way to not only save a buck but also to get in some much needed family time. Check out websites for crafty ideas to keep the kids occupied (ones that involve things around the house rather than things your need to go out and buy).

    Simple Saving Tip #2: Check out free community events. Many communities plan and organize events for school-aged kids over the March break, so why not take advantage of them. Better yet, get together with a few other parents and organize a pick up and drop off schedule so that one parent doesn’t have to do everything and the kids can participate in a group. Libraries and arenas are often a safe bet.

    Simple Saving Tip #3: Skip the trip down south and opt for a day at an indoor waterpark. Pack up the kids and their swimsuits and head to the ‘beach.’ Even more savings can be had if you bring a picnic lunch, rather than shelling out major dough on fast food. Sure, you’ll be basking in the glow of artificial sunlight, but your wallet and the credit cards inside will thank you!

    Simple Saving Tip #4: Plan a movie or game day. Sure, vegging out on the couch may not be something you want to drill into your children’s heads, but the odd movie date never really hurt anyone. Pop your own popcorn or bake some cookies together for snacks and sit down on the couch to enjoy a flick. Or grab those dusty board games from the top shelf and get a little healthy competition flowing.

    Simple Saving Tip #5: Get some fresh air. Check out local hills and grab a toboggan for some fun in the snow. Take the family dog for a long hike through the forest. Take out the skates and head to the local outdoor rink. Bonus: exercise will make you feel better too!

    Just because it is March Break doesn’t mean you need to rack up that credit card debt. Use these simple money saving methods to keep kids entertained without breaking the bank.

    For more information about credit card debt, how to stop it from accumulating or how to deal with it, please contact DebtCare Canada today by calling 1 (888) 890-0888.

  • Rebuilding Credit Doesn’t Have to be Like Climbing Mount Everest

    Rebuilding CreditDebt, for many Canadians, is an everyday issue. But it isn’t only debt that can be problematic – even when you get rid of your debt! If debt has caused your credit score to plummet it might be time to think about getting it back in shape. There are a number of ways that you can work on rebuilding credit, but we thought we’d provide you with some of the best ways to do so.

    Here are some good strategies for rebuilding credit:

    • Keep balances low on all credit products. When you pay off a credit card, or pay it down significantly, keep it that way. However, if you can’t pay off a big chunk at least try to keep the balance low. The typical rule of thumb is no more than 65% of your total available credit. This shows that, although you have access to the credit, you are not relying on it, demonstrating that you are not necessarily living outside of your means.
    • Avoid applying for too much credit. When you apply for any type of credit product, this gets reported to your credit report, and when you continually apply for credit this negatively impacts your overall credit. This is because it looks as though you are a credit seeker – someone who can’t afford to live without credit, but also has a hard time qualifying for it. Try to limit the number of applications you submit, including those done by current creditors (ie. credit limit increases).
    • More than minimum payments. Minimum payments are mostly interest, so in an attempt to rebuild credit try to make more than the minimums, even if it is only a little more than what is required. This has the added benefit of helping you pay off the total balance faster.
    • Keep an eye on your credit report – but don’t go overboard. It is always smart to know what is going on with your credit report, so checking it periodically is a good idea. With that said, checking it every other week is largely unnecessary, and even though your own inquiries are reported to your credit report as ‘soft’ inquiries, they are still reported, and any activity can have an impact on your score. Resist the temptation to check on too regular a basis – perhaps limit it to quarter-annually.
    • Get a secured credit card. With a secured card you, as the cardholder, make a deposit onto the card and this becomes your limit. At the same time, you are required to make regular payments to the card (to pay off your ‘balance’), but if you default the money comes from that initial deposit. Keeping up the regular payments helps to rebuild credit as it shows positive credit activity.

    Rebuilding credit can take time, but it doesn’t have to be difficult. Don’t just assume that because your debt load has decreased, your score has increased significantly. Use these strategies to bring that score back up.

    For more about methods for rebuilding credit please contact DebtCare Canada today at 1 (888) 890-0888 or visit us online at www.debtcare.ca