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  • Why You Should 100% Be Represented in a Consumer Proposal Canada!

    If there is one way to get out of debt it is through a Consumer Proposal Canada. Listen up! This is not a process you should go into unrepresented. Watch this short video by Michael Goldenberg, President of DebtCare Canada, where he discusses why going to a trustee directly for a consumer proposal can have big financial consequences. A Consumer Proposal (Canada) is a great idea if you have a financial problem, but there is a lot of information you need to know before doing so, and DebtCare Canada can help to educate and represent you through the process.

    If you would like more information about making a consumer proposal (Canada) contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • Debt Consolidation Companies in Canada

    DebtCare Canada is a financial consulting company in Canada that helps Canadians consolidate debt and achieve financial relief. Before contacting debt consolidation companies, consider DebtCare. Watch this short video where Michael Goldenberg, president of DebtCare Canada, discusses the services and solutions offered by debt consolidation companies in Canada including DebtCare Canada.

    If you need more information about debt consolidation companies in Canada or need a debt consolidation, please contact DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • 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.

  • 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

  • Canada Revenue Agency Collections Authority and How to Stop Them

    Thousands of Canadians owe money to the Canada Revenue Agency. Thousands more will fall behind filing their tax returns, hoping that by not filing their returns they can buy time to come up with a way to pay the tax that they know they will owe.

    What many people don’t realize is that whether you file or not, the Canada Revenue Agency can still take collection action against you if they believe you owe them money. Whether you file or not, the CRA could have tax slips on file, filed by others who have paid you and based on that can notionally assess you, make their own determination as far as how much income they believe that you earned and then take enforcement action accordingly. In fact, the Canada Revenue Agency can even proceed with enforcement action against you without notionally assessing you. The Canada Revenue Agency collections agents will often leverage enforcement actions to force you to file or comply with whatever information they are requesting from you.

    The size of an individual’s tax debt will in many cases be the result of his or her conduct. An individual who files his or her returns late, fails to declare income and has his or her returns re-assessed or audited will be subject to Canada Revenue Agency interest and penalties. This can, in many cases, double and even triple the size of the tax debt depending on the individual’s record with the Canada Revenue Agency. Each time a taxpayer is not compliant the Canada Revenue Agency records the non-compliance and the next time there is an infraction, the penalties are increased. Interest charged on Canada Revenue Agency debt is high and compounds daily.

    Once the Canada Revenue Agency collections department has decided to target you, they are able to deploy enforcement measures that can cause personal embarrassment and financial hardship. The most common enforcement measures deployed against individuals by Canada Revenue Agency collections agents are wage garnishments (50% of gross employment income and up to 100% of secondary income), property liens and using a document called a “Requirement to Pay” to freeze bank and investment accounts. Where businesses are concerned, the Canada Revenue Agency collections agents will commonly freeze bank accounts but also send notices to the businesses’ clients directing them to forward payment of all invoices to the Canada Revenue Agency. This is very similar to a wage garnishment, only instead of the Canada Revenue Agency collecting 50% of your income in this case, they can collect 100%. This measure forces many businesses out of business.

    If you owe money to the Canada Revenue Agency and can pay, great! But, what happens if you owe money to the Canada Revenue Agency and can’t pay?

    Consumers and businesses also have avenues that they can take to potentially reduce the amount of money that they owe to the Canada Revenue Agency. Programs like the Voluntary Disclosure Program enable Canadians to voluntarily declare income with the potential to avoid interest and penalties. Relief provisions enable clients who have a medical problem, financial hardship or have faced some other extraordinary circumstances to file an application to have some or all of the interest and penalties associated with a tax debt cancelled.

    The Canada Revenue Agency will not allow a consumer to directly propose a settlement on a tax debt. With that said, a consumer or business can stop Canada Revenue Agency collections action through Federal Government programs. When a consumer participates in a Federal Government program, the CRA in most cases will immediately cease collection action. Federal Government programs under the BIA are the only way that a consumer can reduce a principal tax debt and get a fresh start.

    Whether you owe a tax debt, think you will in the future or if you think that you cannot pay, you are best advised to seek professional help before the Canada Revenue Agency collections department begins to take action on your file.

    For more information about Canada Revenue Agency collections and how you can stop them please call DebtCare at 416-907-2582 or visit www.debtcare.ca.

  • Sued in the Small Claims Court? What Happens Next?

    There are over 90,000 new Small Claims Court Actions filed in Ontario each year and more than 150,000 Small Claims Court actions filed throughout Canada. Small Claims Court actions are usually filed by creditors like banks, finance companies and the collection agencies who represent them.

    Court Actions are also filed by individuals and businesses who are suing one another for a particular incident or contract dispute.

    In most Provinces including Ontario and British Columbia, a Small Claims Court action can be filed for up to $25,000.00. In most Provinces, the Small Claims Court process is as follows:

    1.       One party files a claim against another party.

    2.       The other party can then file a Defense.

    3.       If no Defense is filed, the party who initiated the claim can apply for default judgement.

    4.       If a Defense is filed, the parties will then attend a pre-trial conference and if they are unable to settle the matter, the case will proceed to trial. At trial, if the party who initiated the claim is successful he will be awarded judgement.

    Once a judgement has been awarded, the party who has the judgement can then take enforcement action using a variety of Small Claims Court remedies. They can file the judgement with the Sheriff’s office so that in the future if the individual tries to apply for financing (like a mortgage) and an execution search is performed, the individual will be required to pay off the judgement before he can obtain his financing. The party who holds the judgement can also apply for a wage garnishment. When this occurs a “Notice of Garnishment” will be sent to the debtor’s employer requiring the employer to remit 20% of the debtor’s net earnings to the Small Claims Court. The employer cannot refuse to honour the garnishment or else the debt could effectively be transferred to the employer and then he could owe the money.

    The party who holds the judgement can also file a lien on the debtor’s property, like a home or vehicle, and can also send notice to the bank to have their bank account frozen. They can call an assessment hearing requiring the debtor to attend the court and disclose their assets, earnings and more…

    If you owe money to your creditors and are in default, don’t let things go this far. It is better to work with a debt consultant who will work with your creditors to come up with a plan to deal with your debts. If you have already been sued in the Small Claims Court, have had a judgement issued against you and enforcement action is being taken, you have options. There are Federal Government programs that can be accessed through a debt consultant that will stop enforcement action issued by the Small Claims Court. Coming up with a plan to deal with debt owed to creditors will enable you to avoid the stress, embarrassment and financial hardship that can accompany a Small Claims Court action and provide you with a road map to financial recovery.

    For more information about what to do if you have been sued in the Small Claims Court please contact DebtCare Canada at 416-907-2582 or visit www.debtcare.ca.

  • Stopping a Garnishment of Wages in Canada

    Thousands of Canadians have their wages garnished each year for a wide range of reasons. A garnishment of wages in Canada can occur as a result of unpaid family responsibility, judgements that occurred as a result lawsuits (in Small Claims Court or Superior Court) or as a result of debt owed to the government. The most common government debt that results in a garnishment of wages in Canada is a tax debt that is owed to The Canada Revenue Agency.

    Stopping a garnishment of wages in Canada that is related to unpaid family responsibility is very difficult and can only be achieved in one of three ways: 1) through paying the child support arrears, 2) through going to court  or 3) the parent of the child who is owed support waives the support (in some cases).

    If you have a judgement against you in the Small Claims Court, your wages can be garnished up to 20% of your net earnings. If the Canada Revenue Agency imposes a wage garnishment against you, your wages can be garnished up to 50% of your gross earnings and up to 100% of any secondary earnings.

    A wage garnishment can cause financial devastation because the average Canadian will find it difficult to continue to pay for basic living expenses like shelter, transportation and food once his or her income has been reduced by 20%-50%.

    Where Canada Revenue Agency is concerned, it can be difficult to get the CRA to voluntarily lift a garnishment of wages once in place. The Canada Revenue Agency will often demand that the tax debt be paid in full or that a substantial lump sum payment be made before they will consider stopping a garnishment of wages. When a taxpayer owes thousands of dollars, the prospect of raising the money can prove impossible, leaving the taxpayer feeling powerless.

    Where a Small Claims Court judgement is concerned, stopping a garnishment of wages can be expensive because it will often involve returning to court and while you can represent yourself in Small Claims Court, many people will retain legal representation when attempting to get a wage garnishment reduced or lifted to increase their chances of success.

    There is another way to stop a wage garnishment issued by the Small Claims Court or The Canada Revenue agency which may be possible without going to court.

    Through a debt consultant you may be able to qualify under a Federal Government Program to deal with a debt that has arisen from a Small Claims Court Action or Canada Revenue Agency tax debt and that will involve stopping a garnishment of wages. When participating under one of these programs any collection action being taken against you by unsecured creditors will be “stayed” giving you an opportunity at a fresh start. The best course of action will depend on the amount of debt you have, your income and assets. Qualifying under one of these programs may end up being the easiest way for you to stop a garnishment of your wages.

    For more information about stopping a garnishment of wages in Canada please call DebtCare Canada at 416-907-2582 or visit www.debtcare.ca