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Tag: a good financial consultant

  • Small Businesses Can Be Subject to a Wage Garnishment From The CRA Too But How?

    Starting a successful small business takes hard work and perseverance. Unfortunately, small business owners are one of the largest groups that find themselves with tax problems.

    One of the main reasons why small business owners commonly run into trouble with the CRA is because it is tough starting a business and generally in the first couple of years small businesses are not really profitable. In many cases, small business owners don’t pay for bookkeepers and simply collect their receipts all year long. Then, at the end of the year, these owners go to an accountant with what records they have or attempt to do the returns on their own.

    This can result in incorrectly declared expenses and income that can end up costing the small business owner dearly in a re-assessment or audit.

    Other times, small business owners misunderstand filing requirements and fall behind filing returns. In some extreme cases, small business owners do not set aside their H.S.T. and then find that it is impossible to pay it when tax time comes.

    When things reach a breaking point and the CRA begins pursuing the small business owner to collect the tax debt, there are many collection methods – similar to when they collect from a consumer. Just as they can freeze a business bank account, they can also freeze a business owner’s bank account. Typically, when an individual has a tax debt and is employed, the CRA will send a wage garnishment to the employer directing the employer to forward a percentage of the individual’s earnings to the CRA. When a small business owes money to the CRA the CRA can send a notice to the business’s clients, directing them to forward the proceeds of all invoices to the CRA.

    With an individual, HR departments are generally used to receiving wage garnishment notices from the CRA. For small business owners however, this can have a lethal impact on a business and a business owner’s reputation, as many clients and companies may not want to deal with a supplier who has a tax problem.

    A small business owner who has a tax problem must act quickly to avoid the consequences of CRA collection/enforcement action. Tax problems are usually financial problems, requiring a financial solution. At the end of the day, tax debt is debt like any other debt, only the CRA has greater collection powers than regular creditors which creates a major sense of urgency.

    If you are a small business owner with a tax problem you definitely want to come up with a plan before you face the embarrassment of having your clients notified that you have a CRA debt and are facing a possible 100% garnishment of your receivables, which can cause irreparable financial hardship. If the worst has already come true and your receivables are already being garnished you still may be able to stop it.

    Working with a good financial consultant who routinely works with individuals and small businesses who have problems with the CRA is your first step towards a meaningful solution to your tax problem.

    For more information about how to avoid or stop a garnishment of your receivables please contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • Stopping Collection Action before the Holidays

    The holidays should be a time for joy and family, not a time to be stressed out about your finances and trying to deal with bill collectors. Bill collectors are employees of collection agencies, and it doesn’t matter to them what time of the year it is. If a bill collector has been hired to collect a debt he or she will proceed with collection action.

    When bill collectors begin collection action you may feel powerless to stop it. Stopping collection action is difficult, and before you can do it you have to educate yourself about what types of collection action are legal. You also need to have a plan to deal with the debt. This way, when you begin taking steps towards stopping collection action, you have something to propose to your creditors to satisfy them so that you can enjoy your holiday without worrying about your debt.

    Generally speaking, the number one tactic that collection agencies deploy is communication. They will communicate with you by phone and by mail. The agency may call you several times per/day, in the evenings and on the weekends. For those of you who live or work with others who don’t know about your debt, this can be very embarrassing.

    Some collection agencies have paralegals on staff and have the ability to sue you. In this case, stopping collection action can become even more difficult because the court is involved. With that being said, it is possible to stop collection action being taken against you, even if the collection agency has sued you on behalf of your creditor.

    Certain communication from collection agencies is acceptable, while other forms of communication are not. Excessive phone calls, leaving personal information on voicemail or threats are all tactics collection agencies are not allowed to use when collecting a debt. Collection agencies in Ontario are regulated by the Ministry of Consumer Services. On the Ministry of Consumer Services website you can learn about your rights and even lodge a complaint if you believe that a collection agency has violated them.

    Now, if you have debt that has gone to collections you cannot ignore it. While you may be able to stop some collection actions, the debt will not simply go away. Owing that money is not the only thing to think about, as collection action can have long-term implications on you and your family. You need to have good credit these days because everyone checks credit. Having bad credit and debt can impact your ability to get a job, buy a home and even open a utility account or bank account.

    There are programs available which are effective at stopping collection action, even if the collection has a judgement against you or plans to or is garnishing your wages. These programs can also help you get rid of your debt and rebuild your credit. This is why it is so important not to ignore your debt over the holidays and look for ways to deal with it once and for all.

    By working with a good financial consultant, you can have your credit and finances reviewed to see what options are available to you and you may find that you can start the New Year collection free.

    For more information about stopping collection action and how to deal with your debt please contact DebtCare by visiting www.debtcare.ca or call 416-907-2582.