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.