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Tag: debt relief

  • Debt Relief in Canada Blog Series Part 1 – Is a Consumer Proposal the Answer?

    Debt relief in Canada is a subject that is constantly in the news for many reasons, whether it is the government reporting on the fact that Canadians are carrying historically high levels of debt, reporting on debt reduction companies and what to watch out for, reporting on changes to CMHC lending guidelines to stop those who are loaded with debt from buying homes that they really can’t afford, and more…

    Unfortunately, most people who have too much debt don’t realize that they have a problem until managing minimum payments starts to become challenging, resulting in a debt problem turning into a debt emergency. There are many options for debt relief in Canada, but each one is different, and the right one for you will really depend on your own personal circumstances.

    Making a consumer proposal is one option for debt relief in Canada, but the question is: is a consumer proposal the answer?

    A consumer proposal is a type of proposal that is made to your creditors and is administered by a bankruptcy trustee who represents both you and the creditors that are included in your consumer proposal. Consumer proposals are crafted based on your ability to repay your debt realistically. Consumer proposals are repaid monthly, usually over a period of 3-4 years. With that being said, a consumer proposal can be paid off sooner if your financial situation changes. Consumer proposals are removed from your Equifax credit report 3 years from the date that they are paid in full, which provides a further incentive for those who are in a consumer proposal to pay it off early. Because consumer proposals allow you to make a single monthly payment that fits within your budget and enables you to rebuild your credit faster, consumer proposals are a very popular option for debt relief in Canada.

    Since consumer proposals are based on your ability to make a monthly payment and not on your total debt load, oftentimes consumers can reduce their overall debt through a consumer proposal. In a simple, very general example, if your total unsecured debt is $20000 and you can afford to pay $200 per/month for 5 years based on your budget and the consumer proposal guidelines, the total value of the consumer proposal would be $12000, meaning you would reduce your debt by $8000. Each case is different, and your consumer proposal must be fair to your creditors as they have a say as to whether or not they will accept it.

    When you make a consumer proposal, your creditors will receive your consumer proposal by mail and have 45 days to respond and vote as to whether they accept or reject your proposal. If a creditor does not respond to the consumer proposal within 45 days, they lose the ability to vote and the proposal is considered accepted. In addition, if the majority of your creditors accept the consumer proposal, it will be approved.

    Consumer proposals are suited to individuals who have higher incomes, as they are subject to surplus income in bankruptcy.  When a consumer has surplus income his or her payment in bankruptcy will be much higher and this is what makes a consumer proposal a more attractive option for a higher income earner. Consumer proposals are also better suited to an individual who has some secured creditors and to someone who has the ability to repay a good portion of his or her debt but simply cannot manage the contractual payments that they currently have with creditors.

    For more information about options for debt relief in Canada or to see if you qualify for a consumer proposal please call DebtCare at 416-903-4000 or visit www.debtcare.ca.

  • Taxpayer Relief in Canada – Do I Qualify

    If you have a tax problem in Canada, repercussions with the Canada Revenue Agency can be severe. If you filed your income taxes late or committed an infraction under the Canadian Income Tax Act, like failing to disclose income or writing off expenses that you weren’t entitled to, the Canada Revenue Agency has incredible power to punish you. By far the most common weapon that they use to punish you is your pocket book.

    When an income tax return is filed late and the CRA assesses what you owe, or a previously filed return is re-assessed and new monies are owed, the CRA will add interest and penalties to the amount of the tax debt that you owe. Often times, when an individual has a tax debt, the amount that they owe will double in size once the interest and penalties are calculated.

    Sometimes individuals have personal circumstances that led to their tax problem which is why taxpayer relief in Canada exists. Taxpayer relief in Canada is a formal program offered by the Canada Revenue Agency where the CRA can agree to cancel all or part of the interest and penalties. You can qualify under the Taxpayer relief program in Canada for one of the following reasons:

    A natural disaster like a fire or flood. For example, you misstated expenses resulting in an inaccurate return filing because your basement flooded and all of your receipts were destroyed

    1. Extreme financial hardship
    2. A documented personal issue like a medical problem or death in the family
    3. An error on the part of the CRA

    The only challenge with the Taxpayer relief program in Canada is that it is a long and complicated process and very few applications under this program are granted. To hire a professional to make an application under this program could cost you thousands. In addition, the CRA will not reduce the principal tax debt owed. The CRA does not offer any program that will reduce the principal tax debt that is owed.

    Before considering making an application under the Taxpayer relief program in Canada you may want to first look at the principal amount of the tax debt you owe and whether you can afford to pay it off at all. Often people who owe a large tax debt are not even in a position to pay it, regardless of whether or not they receive interest and penalty relief under the Taxpayer relief program in Canada.

    The longer you stretch out the time that you have a tax problem, the worse the tax problem will become. If the application under the Taxpayer relief program in Canada is denied, you will owe further interest that will have accumulated through the application period. The CRA will also continue to try to collect on the principal tax debt owed.

    There are other financial programs available that will freeze the interest on the tax debt that you owe and can even eliminate or reduce interest, penalties and the principal tax debt that you owe. These programs can also stop CRA collection action and provide you with immediate relief. These programs are not available through the Canada Revenue Agency, however you may access them through a financial consultant who works with people who have debt problems.

    For more information about the Taxpayer relief program in Canada or if you have a tax problem and need financial guidance or debt relief please visit www.debtcare.ca or call 416-907-2582.

  • What Does A Trustee Do?

    If you have financial problems and have thought about consulting a trustee in bankruptcy, you may be curious about the role that they play in helping you deal with your financial problems, and may be asking yourself “what does a trustee do anyway?”

    The first thing to know is that a trustee in bankruptcy does not represent you. You may have seen advertisements by trustees that make it seem as though they want to help you. What does a trustee do? Well, they are a court appointed officer that administers bankruptcies and consumer proposals. They have an obligation to act in the best interest of both you and your creditors.

    Let’s look at a bankruptcy as an example. When you visit a trustee to file for bankruptcy they review all of your household income, debt and other financial details and then advise you on what your monthly payment in bankruptcy will be. You make your monthly payment to the trustee in bankruptcy each month. If you have assets or surplus income for example, what does the trustee do? They will ensure that they collect equity in those assets or surplus income for the benefit of your creditors. They are not there to protect your income and assets, they are simply administrators of the bankruptcy process. If they can collect more money through your estate for your creditors, they will.

    Consumer proposals are also administered by trustees in bankruptcy. When you visit a bankruptcy trustee directly to discuss a consumer proposal, they will assess your income, debt, assets and other personal household and financial information. What does a trustee do next? They will suggest an amount of a consumer proposal that they believe will be accepted by your creditors. This does not always result in the best deal for you, and if you visit a trustee directly you will have little to no negotiating power because they are simply administering your consumer proposal, so what they present to you is what they will be prepared to go forward with. They are not there to get you the best deal.

    Do you do your taxes without the help of an accountant? Not likely. If you were charged with a crime would you defend yourself without a lawyer? Probably not. Dealing with a trustee in bankruptcy is no different; you should not do so unrepresented.

    Having independent financial representation when considering a consumer proposal or bankruptcy is crucial because it enables you to have your personal and financial information reviewed by a professional who represents and is hired by you and who understands bankruptcies and consumer proposals. They can vet your personal and financial information, identify any issues before a trustee is made aware of them, and help you come up with a proposal to present to the trustee that you can live with.

    Do not answer the question “what does a trustee do” the hard way. Filing a bankruptcy or consumer proposal is an official process. Once you have committed to either one of these processes there is no turning back, so it is important to do everything in your power to ensure that you enter into the process with all of the necessary information. The more informed you are, the better financial arrangements you will be able to make, which will save you thousands.

    If you have more questions about this article “What does a trustee do?” or if you need representation in a consumer proposal or a bankruptcy please visit www.debtcare.ca or call 416-907-2582.

  • Divorce and Debt – A Match Made in…

    Divorce and debt, debt and divorce; the two really go hand-in-hand. Debt and financial problems are one of the leading causes of divorce in Canada. When couples divorce and debt is present one or both parties can find themselves in severe financial turmoil.

    Divorce and debt are a toxic combination because when couples divorce they can no longer share living expenses and each will have new living expenses in addition to monthly payments on debt. In a divorce, the higher income earner may end up having to take more responsibility over the debt. In other cases, the lesser income earner may agree to take responsibility for the debt in order to gain assets such as the home. One party may end up having to make spousal or child support payments. Whichever way you look at, getting divorced is expensive and both parties can end up with serious financial consequences.

    If you are getting a divorce and debt is present, seeking financial guidance will be very important. The financial guidance you need may vary.

    Perhaps you are not the spouse who was responsible for the monthly household bills. Learning how to manage a budget will be important if you want to come out of your divorce with your credit and finances intact. Budgeting is eye opening because it reveals exactly how much money you spend each month and on what, as well as how much disposable income you have left once your bills are paid. Budgeting can reveal potential future financial problems that you may face before they emerge and become an emergency. Budgeting also plays a key role in ensuring that all payments to creditors get made on time each month.

    Perhaps you are exiting the marriage in debt. This is a trickier problem because if you have gone through a divorce and the debt that remains is unmanageable, this can impact not only your credit but also your quality of life. Even if you are able to manage your minimum monthly payments, the overall amount of debt may be too much to pay off in any reasonable amount of time. If this is the case, it may be time to come up with ideas to speed up the amount of time it takes you to get out of debt.

    The type of debt that you have and amount of debt that you have will play a major role in the type of financial solution that you choose to deal with your debt. Secured debt is different than unsecured debt, and even some secured debts can be managed as part of an overall financial plan that will get you out of debt. If you are struggling with debt after a divorce, your financial plan may include consolidating your monthly payments into one and freezing the interest on your credit products. The interest on some credit products, like high interest credit cards, can make them impossible to pay off. Once the interest is frozen, these debts become much easier to repay. Some financial programs also may involve reducing the overall principal of the debt that you owe.

    The best thing you can do in the aftermath of a divorce to deal with the debt that has resulted from the divorce is to seek financial guidance from a financial professional who can represent you in the restructuring of your debt to give you a fresh start.

    For more information about divorce and debt please visit www.debtcare.ca or call 416-907-2582.

  • Credit Counselling Canada – How Does It Work and Who Qualifies

    If you are having challenges managing your debt there are many solutions available. The solution you choose will largely depend on your personal and financial circumstances. The amount of debt that you have, for example, will change the financial solutions available to you.

    Credit counselling Canada is a service that helps many Canadians deal with financial challenges. Credit counselling Canada, like any other financial solution, has its pros and its cons. While Credit counselling Canada can help Canadians with any amount of debt, you are best suited to consider it as an option if you owe $7,000 or less in total debt.

    Credit counselling Canada is largely funded by creditors and is not for profit. The credit counselling agency will make a proposal to your creditors that allows you to make a reduced, fixed monthly payment each month. This proposal is not a consumer proposal and this proposal will not reduce your overall debt. It simply provides for a reduced monthly payment.

    The main benefit here is that if you cannot manage your current monthly payments, this will enable you to do so. People who have payday loans and only payday loans are best suited to consider credit counselling Canada. Generally people who have multiple payday loans and no other debt only owe a small amount of money, so other financial options, such as a consumer proposal, are not available to them. Credit counselling Canada will enable someone who has expensive payday loans to make a single reduced monthly payment that they can afford.

    The cons of a credit counselling program include:

    • Damage to credit (likely damage to credit has already occurred though if you are not managing your monthly payments)
    • Overall amount of debt is not reduced
    • Depending on the repayment plan you negotiate, it could extend over many, many years

    The cons that exist with Credit counselling Canada are the primary reasons why an individual who owes more than $7000 should consider other financial options rather than jumping into a credit counselling program.

    A consumer proposal is often a better option than a credit counselling program. When a consumer proposal is arranged, it is formal and final. If your creditors accept a consumer proposal you have the option to pay it off in full at any time. While a consumer proposal can also have some negative impacts on your credit, your credit can often be repaired faster with a consumer proposal when compared to a credit counselling program. Evidence of a consumer proposal will be removed from your credit report three years from the date it is paid in full.

    A consumer proposal may reduce the overall amount of your debt, and because you can pay it off in full, the ball is in your court as far as how long it takes for you to pay it off in full.

    Generally speaking, if you have a financial problem that is resulting in an inability for you to make your monthly payments, or if you have too much debt, you should seek financial guidance. It is advisable to seek this guidance from an independent financial professional who you can hire to help you make the best financial decision and who does not work for the company that is providing you the services. For example, if you are considering a credit counselling program, do not go directly to the credit counselling agency because they will advise you based on the programs they have available, or if you are considering a consumer proposal, do not go directly to the trustee in bankruptcy or you may not get the best deal.

    For more information about credit counselling Canada or to see if you qualify please visit www.debtcare.ca or call 416-907-2582.

  • Canada Revenue Agency Forms and Requests: – Beware

    If you have a tax debt that you cannot pay in full, you should be very careful dealing directly with the Canada Revenue Agency (CRA). In fact, many agencies, including law firms, advise people who have large tax debts not to deal with the Canada Revenue Agency directly.

    Why? Because CRA agents are hired by the government to collect the tax debt from you. Their primary objective is to close your file and that will only happen in one of two ways: pay the tax debt you owe, or file a consumer proposal or bankruptcy.

    The Canada Revenue Agency has many tools in its arsenal to collect your tax debt. These tools include garnishing your wages, freezing your bank account and placing a lien on your property. They cannot however take these enforcement actions against you unless they have done their homework. For example, they can’t freeze your bank account unless they know where you bank, they can’t place a lien on your home unless they know you own a home, and they can’t garnish your wages unless they know where you work.

    Of course, the Canada Revenue Agency does have its own ways to find this information, but sometimes you can be your own worst enemy in this regard. Many people want to make payment plans with the Canada Revenue Agency to pay their tax debt and will directly contact the Canada Revenue Agency to attempt to do so. The CRA always wants to be paid in full. Generally they won’t accept a long term payment plan unless it involves paying off the tax debt within 24 month, which many people are unable to do when they have a large tax debt. This is where Canada Revenue Agency forms and requests come in.

    Say for example you owed $40,000. Over 24 months, your monthly payment would be $1,666 per/month but you can only afford to pay $500 per/month. When calling the Canada Revenue Agency they may indicate that they are willing to accept a temporary 3-6 month payment plan based on $500 per/month if you fill out a Canada Revenue Agency form providing financial disclosure. This form will ask you about your income, income sources, expenses, assets, liabilities, where you bank and more. Once they receive your financial disclosure, they may disallow payments for expenses that do not include shelter, food and transportation and then demand a much larger monthly payment. They may accept the lesser monthly payment for 3-6 months but the danger is that if they demand more, or when the short term payment plan you negotiated expires, the CRA will have all of your personal financial information that you provided in the Canada Revenue Agency form and can proceed to take enforcement action against you. Don’t get caught in this trap.

    If you owe money to the Canada Revenue Agency there are solutions available to you. If the CRA has presented you with one of these Canada Revenue Agency forms for financial disclosure, seek professional help immediately. A seasoned financial consultant with experience dealing with the Canada Revenue Agency can help you negotiate a repayment arrangement that you can live with and help you protect your personal information.

    For more information about Canada Revenue Agency forms and requests to beware of or if you need help with a tax problem, please contact DebtCare Canada at 416-907-2582 or visit www.debtcare.ca.

  • How to Make a Credit Card Debt Settlement

    When credit card debt begins to build up it can become very difficult to pay off. Credit cards bear monthly compound interest so if you get into a routine of making minimum monthly payments, the interest can sometimes be as much as the payment that you make. The end result is that you make a minimum payment and then once the interest is applied to the balance, you end up owing the same amount as you did before the payment.

    If you start missing payments the balance increases and late fees may also be added to the balance, making the debt grow even larger. This can start a vicious cycle that can result in the credit card debt going to collections and destruction of your credit.

    There is no magic bullet for dealing with credit card debt. Your options are really to come up with the money to pay it off, borrow the money to pay it off, make a credit card debt settlement, or file a consumer proposal or bankruptcy.

    Before choosing an option to deal with your credit card debt you must look at many factors as you want to make sure that you select the option that will help you to achieve your long term financial goals. Why are you having a problem paying the credit card debt in the first place? Often times people stop being able to manage their credit card debt because of a lack of cash flow. If you are at the point where you cannot manage your credit card debt payments because of a lack of income then you may want to look at ways to reduce the credit card debt before you start trying to come up with a way to pay it off.

    The state of your credit report is also an important consideration when trying to come up with a plan to pay off credit card debt. If you fully defaulted on the debt (have not made a payment in 6 months) or have made habitual late payments, your credit report is likely to be in bad shape. Once your credit report is compromised, (whether you pay off the credit card debt in full or make a credit card debt settlement) there will be no difference in how long it takes to rebuild your credit. There will however be a major difference in how much it costs you to pay off the credit card debt.

    A credit card debt settlement can be achieved through a financial consultant who can make a credit card debt settlement directly with your creditor or through obtaining the assistance of a trustee to make the credit card debt settlement through a consumer proposal. The credit card debt settlement option will depend on many factors including your income, employment, financial goals, the amount of debt you have, the liquid cash available, and the number of creditors you have. If you want to make a credit card debt settlement, work with a financial consultant. He or she will be able to interpret your entire financial situation and come up with the best plan for you.

    For more information about how to make a credit card debt settlement please contact Michael Goldenberg by calling DebtCare Canada at 416-907-2582 or visit www.debtcare.ca.

  • The Canada Revenue Agency Consequences of Missing the Income Tax Deadline

    In Canada, this year’s Canada Revenue Agency (CRA) income tax deadline was April 30th, 2012. The CRA’s income tax deadline is the last date that individual Canadian taxpayers can file their annual income tax returns with the CRA without incurring penalties and interest. Corporations are not subject to this deadline and have their own year-end filing dates.

    If you file your income tax return after the income tax deadline of April 30th, 2012 and you owe tax, the amount that you owe will be subject to interest and penalties. Penalties and interest are calculated based on the length of time it took for you to file following the tax deadline.

    The Canada Revenue Agency will apply a penalty equal to 5% of the balance owed. For the next 12 months, an additional 1% will be owed each month that passes that your tax return is late. Repeat offenders (those who filed their income tax returns after the income tax deadline in 2008, 2009 or 2010) could be subject to a penalty of up to 10% and for the next 20 months, an additional 2% of the balance owing for 2011 for each month that your income tax return is late.

    Penalties and interest are calculated separately. If you miss the income tax deadline, the Canada Revenue Agency will charge you daily compound interest beginning May 1, 2012 on any amount owing for 2011 that is not paid. The CRA will also apply the same interest to any penalties they have assessed.

    It doesn’t pay to ignore late income tax return filings. Eventually you will have to file and will be subject to the penalties and interest retroactively. Failing to file your income tax return is tax evasion and eventually the Canada Revenue Agency will catch up with you. Depending on how many years you haven’t filed they could prosecute you for tax evasion.

    Notional assessments are more common. A notional assessment occurs when the Canada Revenue Agency estimates how much income that they believe you earned based on tax slips filed by others or on returns you filed in previous years. When this happens, the Canada Revenue Agency essentially prepares a return on your behalf and then calculates how much tax you owe and assesses interest and penalties based on their income estimate.

    Most individuals who miss the income tax deadline do so because:

    • They don’t think they owe taxes
    • They are busy and it slips their mind
    • They know that they will owe and don’t have the money      to pay

    If you fall into the third basket there are financial solutions that can assist you. Simply ignoring your income tax problem will not make it go away. Over time, the size of the tax debt, interest, and penalties will continue to grow and the Canada Revenue Agency will become more aggressive in their efforts to force you to file and collect your tax balance. The faster you face it the faster you can get back on track. If you are behind filing for many years, it is never too late to become tax compliant and deal with your tax debt.

    For more information about the income tax deadline, interest and penalty calculation, or if you need help to deal with late income tax returns and income tax debt, please call DebtCare Canada 416-907-2582 or visit www.debtcare.ca

  • Debt Reductions Companies in Canada – Do Your Due Diligence

    When making a big ticket purchase like a vehicle, you do your research right? You check the history of the vehicle, ensure it has not been in accidents, learn about the ownership, check the maintenance record for the vehicle and more. Your personal finances are no different and if you are in financial trouble, before choosing a company to help you, you really should do the same kind of research.

    “The banks are offering a program that’s about to run out” or “time is running out on Federal Government Programs”; sound familiar? Debt reduction companies are spending hundreds of thousands of dollars on advertising per/year to sell you on this message. The question is; is it true? And do they “really” help? Is there really a program that all of the banks collaborated on and is time running out? Is it true that the Federal Government programs that help Canadians get out of debt could end in the near future? And…what do they do anyway? Let’s get to the bottom of it.

    First of all; all of the banks have not gotten together to offer a debt reduction program, hence time is not running out; because it simply isn’t true. The only Federal Government programs that help Canadians deal with debt are administered under the Bankruptcy and Insolvency Act (BIA). The Federal Government has made no announcement that there is a plan to eliminate the BIA legislation and there is no other Federal Government program that we are aware of that helps Canadians get immediate, legislated, debt relief. Seeking debt relief under the BIA does not mean that you have to go bankrupt and Federal Government programs are a viable means to get out of debt when a financial crisis emerges. The BIA offers different remedies to deal with debt, but the principal program offered by debt reduction companies doesn’t even involve relief under the BIA.

    Debt reduction companies collect money from you on a monthly basis over a period of years with a promise that in the future they will settle your debt. By way of contrast, debt consulting companies represent you and provide you with a range of options to deal with debt that could include a consolidation or even enrolment in a credit counselling or Federal Government program. Debt reduction companies have one primary goal and that is to collect your money on a monthly basis. This is where the money that they use to advertise to you comes from. The Financial Consumer Agency of Canada (FCAC) recently issued a consumer alert about debt reduction companies; you can view the alert here http://news.gc.ca/web/article-eng.do?nid=649969.

    Before you deal with a debt reduction company, do your due diligence. While writing this article we took some simple steps that any consumer who has access to a computer can take to research a company; the results really scared us.

    We visited the first debt reduction company’s website and there were many red flags. First, there wasn’t any information about the company’s ownership. Are they Canadian? American? Who is their president and what does he or she stand for. The company publishes no information about their ownership whatsoever. Red flag #1!

    We Googled “who owns [company name]” and nothing came up. Red flag #2!

    We went to Linkedin and ran a search by company name to see how many professionals on Linkedin are employees of the debt reduction company. The only profile that came up was an individual page branded for the company – not one employee and not a single name of anyone associated with this company emerged as a result. You would expect that a company that bills itself as a national provider of debt reduction services would have at least one employee with a profile on Linkedin; the world’s largest professional networking site. We would liken this to you not knowing a single person who has a Facebook account. Red flag #3!

    Finally, we searched “[company name] reviews” and on the first 3 pages of Google we found no less than 6 pages by companies who represent people and individuals themselves who reported very serious claims about this debt reduction company. Red Flag #4!

    Don’t believe everything you hear! Ads are paid for by the advertisers, companies pay the BBB to be members and any company who doesn’t wilfully and publicly provide information about their corporate structure and ownership, may not be a company you should commit to paying hundreds of dollars per/month for years to come.  When it comes to debt reduction companies do your due diligence.

    For more information about debt reduction companies and how you can do your due diligence please call DebtCare Canada at 416-907-2582 or visit www.debtcare.ca

  • Wage Garnishments in Canada – How to Stop a Garnishment on Your Wages

    Thousands of Canadians have their wages garnished each year. In the past few years there have been more instances of individuals having their wages garnished because of the turbulent economy. Wage garnishments in Canada occur when one party believes that another party owes him or her money and pursues enforcement action.

    Wage garnishments in Canada are generally issued in one of three ways.

    The first most common reason a wage garnishment is issued is when a debt is owed to the government and the individual is unable to make a satisfactory, voluntary repayment arrangement. Some examples of this are: tax debt owed to The Canada Revenue Agency or The Minister of Finance or a debt owed to the Province and/or Federal Government for an unpaid student loan. If the government wants to place a garnishment on your wages, they don’t have to obtain a court order to do so. If you want to know how to stop a garnishment on your wages, the answer is pretty much black and white. You either have to make an acceptable voluntary repayment plan with the government so that they agree to lift the garnishment on your wages or participate in a Federal Government program to seek debt relief. Wage garnishments that are issued by the government can be applied at up to 100% of your wages.

    The second most common reason that a wage garnishment is issued is when one party sues another party in the Superior Court of Justice and is awarded judgement. Once awarded judgement he or she can apply to garnish the individual’s wages. A common occurrence is when an individual defaults on a debt to a creditor and then the creditor sues him or her in the Small Claims Court. When a wage garnishment is issued through the Small Claims Court in Ontario your wages can be garnished up to 20% of your net earnings. If you want to know how to stop a wage garnishment issued by the Superior Court you have three choices. Make a voluntary payment plan arrangement with the party who sued you where they agree to lift the wage garnishment, to make a motion to the Court offering a voluntary payment plan and asking that the wage garnishment be set aside, or by applying to a Federal Government program for debt relief.

    The third most common reason wage garnishments are issued is as a result of child support arrears. If you want to know how to stop a wage garnishment for child support arrears you have only one choice and that is to apply to the Court to have it removed. This can be very challenging to accomplish. A Federal Government program will not stop a wage garnishment for unpaid child support.

    The fastest most effective way to stop a wage garnishment is through a Federal Government program. The benefit achieved by leveraging a Federal Government program to stop a wage garnishment is that the garnishment will be stopped, interest will be frozen, in many cases you can have the principal amount of the debt that you owe reduced and make a voluntary monthly payment.

    Participating in a Federal Government program will require that you include all debt that you owe. If you have debt to other creditors like credit card providers, loan providers, unpaid cell phone bills etc., these debts will also be covered under the Federal Government program. This will mean that they too will have their interest frozen and in many cases the principal debt reduced. In the event that you had several debts you would make a single monthly payment under the Federal Government program.

    If you are having a financial problem and your wages are being garnished it could lead to increased financial hardship. You don’t have to suffer and there are options available.

    For more information about wage garnishments in Canada and how to stop a garnishment on your wages please contact Michael Goldenberg at DebtCare Canada by calling 416-907-2582 or visit www.debtcare.ca.