If you filed your taxes on time in April, you’ve probably received your assessment. If you’re in the clear, or received a refund, great! However, if you owe the Canada Revenue Agency (CRA) and own your home, you need to be beware – a property lien may just be headed your way.

A CRA property lien is a common type of enforcement action used to assist in the collection of a debt, just like a wage garnishment or a frozen bank account. The CRA can place a lien on your home at any time if a tax debt is not paid. Once the lien is in place, time is not on your side.

How does the CRA find out you own your home?

• Often you’ve told them! If, at any point, you called the CRA and attempted to reach a realistic settlement, you likely shared information about where you live, work, even where you bank. This is how most enforcement action commences – thanks to these phone calls.
• An agent runs a property title search. The CRA has access to software which they can use to run a search with just your name or a suspected address and find out if you own the property. Using this method, it is even possible to determine roughly how much you owe on your mortgage and accordingly to determine your equity position.

If you owe the CRA and can’t repay the full amount, as long as there isn’t a lien on your home, the CRA remains an unsecured creditor and you have several options.

If you own your home, you can first explore mortgage options. If you have significant equity, great, a second mortgage might be the answer. However, if you owe the CRA far more than the equity you have in your home a consumer proposal may be a better option.

In a consumer proposal, you offer the CRA a proposed sum that will be repaid over a term of 4-5 years. Interest is frozen and enforcement action such as wage garnishments and frozen bank accounts stop.

However, if the CRA places a lien on your home your options become far more limited. Now the CRA is a secured creditor, and once this happens they have more protection in a consumer proposal or bankruptcy and become far harder to negotiate with.

If you own a home, and owe the CRA consult a financial professional as soon as possible about your options. At DebtCare, we can look at your entire financial portfolio, give you options and even negotiate the option you choose to protect you and get you the best deal.

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