DebtCare is getting readyto roll out a brand new programto help you take on the mighty credit reporting agencies an
d fix errors on your credit report, repair bad credit and get back to a place where the banks are competing for your business! We can help you deal with the stress of errors on your credit report – giving you time to focus on more important things!
Want more info? Call us today at 1-888-890-0888.
We’ve been hearing murmurings for months now about the state of Canada’s economy – according to economists, we are headed for trouble, and that could mean heaps of financial trouble for the average Canadian household – particularly those struggling with debt.
According to a recent CBC News article, “Canada’s Economy ‘Dead in the Water,’ Headed Toward Recession,” those murmurings are actually more than just murmurings: http://www.cbc.ca/news/canada/manitoba/canada-s-economy-dead-in-the-water-headed-toward-recession-1.3099645.
Is Canada headed for a recession? The article states: “Recessions are defined as two consecutive quarters of negative growth. Recently, we learned from Statistics Canada that Canada’s economy shrank between January and March, the biggest decline in GDP since 2009, and the first contraction in the last four years. In fact, the economy contracted in all three months.” So, in a word, yes. It looks as though Canada’s financial future is a bit murky to say the least.
This prospect is a result of a number of factors: private sector investment has declined dramatically as a result of the oil crisis. Consumers are also cutting their spending dramatically (lowest level since 2009) and governments are decreasing spending as well. The Bank of Canada has dropped interest rates twice this year so far, and this is bound to make an impact too, although for better or for worse has yet to be determined.
So what can the average family do to combat this challenge? If a recession is in fact in Canada’s future, the best thing to do right now is get finances in order, pay off debts, deal with bad debts, and start saving if possible.
For many Canadians, this may seem easier said than done – after all, the average Canadian household is sitting at just under $100,000 in debt, according to another recent CBC Newsarticle. However, taking a few simple, yet significant steps, can help you reduce your overall debt, deal with collection action, and help you better manage financially.
Want to know more about how to get your finances back on track before a recession hits? DebtCare Canada can help. Call us today at 1-888-890-0888.
The holiday season is fast approaching, and that means a season of giving and joy – unless you owe money to the Tax Grinch. Unfortunately, even at the happiest time of the year, the CRA is determined to get money owed to them, and they’ll often leverage a frozen bank account to get it – even during the holidays. When there is money on the line, the CRA will not hold back.
Toronto’s Marion Hill experienced just this scenario. After trying unsuccessfully to negotiate with the CRA to come up with a reasonable payment plan, Hill found herself facing a frozen bank account – unable to pay bills, even basic living expenses, just in time for Christmas. Hill, like many other Canadians, found herself fighting with the federal government to try and get the freeze lifted, only to be met with denial on all fronts.
You can read more about this story here: http://globalnews.ca/news/1023012/toronto-womans-account-frozen-over-back-taxes-just-before-christmas/.
When you have a tax problem, time is not your friend. Ignoring the problem is also not an option – doing so won’t make it go away and will typically result in a problem that continues to grow as time goes by. And a frozen bank account won’t be the only action the CRA will take. The CRA will often adopt a multi-tiered approach, placing a lien on your house, and garnishing your wages. If you have assets you want to protect you have to act now before the collection action begins.
Perhaps you should try your hand at negotiating with the CRA – maybe that will work? Be careful – the government is not your friend. Trying to negotiate with them will often lead to further trouble, as they will often discuss the possibility of a payment plan in exchange for personal information – personal information they can use to come after you once they’ve decided that a payment plan will not be granted.
So what can you do? Bankruptcy and a consumer proposal are both viable options depending on how much you owe. These actually represent the only options to stop CRA collection action such as a frozen account or a garnishment in its tracks. Once you file either one, the bank has to unfreeze your account and give you back access to the money.
A bankruptcy and consumer proposal are also the only ways to legally reduce a principal tax debt. Often your creditors, understanding that many will never be able to pay what is owed, will accept a reduced total in exchange for a legally binding agreement that sees them receive regular payments.
Want to know more about how to deal with a tax debt, and perhaps reduce the principle debt? Call DebtCare Canada today at 1-888-890-0888.
When money is tight, and bills can’t always be paid, choosing one bill over another may seem like the lesser of two evils. What can it hurt, letting a bill go unpaid, then planning to pay it the following month? Then next month’s statement comes, and the amount owing has doubled, so you opt to pay it and leave a different bill unpaid. What originally seemed like a solid plan has quickly turned into a nightmare. When this is the case, repairing bad credit becomes incredibly difficult.
However, once you regain control of your finances, those items listed on the credit report should just disappear, right? After all, you are managing your money more effectively and not missing any bills. Unfortunately this isn’t how it works. This is especially true when items are sent to collections.
Evolution of an erroneous collection item on your credit report:
Credit reporting agencies are regulated and have to follow the Consumer Reporting Act. They are regulated by the Ministry of Government and Consumer Services. According to the Act, after 7 years of no activity on an account (activity is a payment, using the account, writing off the account, etc.) it should be removed from the credit report. However, sometimes this does not happen.
What are your options? Should you just continue to wait and hope for the best? No. There is no guarantee that the agency even knows about the mistake – they probably do not. This means you have to get your credit report, prove that no activity has taken place, and then start the battle with TransUnion and Equifax.
Great, a battle has to take place? The pen may be mightier than the sword, but that doesn’t necessarily mean these agencies are apt to read whatever you’ve written. Sometimes it takes a bit more pushing and shoving to get the job done. What you need is someone in your corner who can take up arms in your defense, a representative with the knowledge and understanding of both how these agencies function as well as the importance this issue holds for your financial stability.
Bad credit makes it almost impossible to do anything, things like financing a home or car, and if you get the financing interest rates will be sky high! Don’t let the prospect of repairing bad credit scare you – it needs to be done.
DebtCare Canada has a brand new program that places a representative in your corner – someone with the ability to deal with TransUnion and Equifax and have old items removed from your credit report. When it comes to repairing bad credit, call us for help: 1-888-890-0888.
With Canadian consumer debt on the rise, it is no surprise that filing for bankruptcy has become a popular form of debt relief. The ability to combine all debts and make one monthly payment, as well as the ability to halt collection calls and collection action, has proven to be quite appealing for a vast number of people.
Accordingly, a vast array of individuals from diverse demographics are choosing this option -but which group is most likely to go this route? According to a recent CBC News article, it seems a lot of seniors are filing for bankruptcy as a way to get relief from debts that have piled up.
The article states, “According to a review of 6,000 insolvency filings handled…in 2013 and 2014, the share of debtors aged 50 and over increased to 30 per cent compared with 27 per cent in the previous two-year period,” with credit cards and payday loans representing the debts of highest concern.
The report also found that seniors and those in pre-retirement have accumulated the highest unsecured debt load among all age groups: “On average, debtors 50 and older filing for insolvency had $68,677 in unsecured debt, while those over 60 had total unsecured debt of $69,031.”
You can read more about this here: http://www.cbc.ca/news/business/seniors-in-ontario-make-up-30-of-bankruptcies-report-1.3060463.
Furthermore, according the Globe and Mail, several factors have contributed to this, including the higher number of personal loans being granted to adult children. For seniors with children, a loan to a child has become quite common, and although intentions may be good, often these loans go unpaid, leaving parents in a position of financial strain.
Additionally, seniors are the ones with the highest unpaid tax bills owed to the Canada Revenue Agency. Read more on this here: http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/growing-number-of-seniors-account-for-ontarios-insolvency-filings-study/article24236617/.
This rising senior debt, coupled with the fact that income is generally less in the post-retirement years, has led many seniors to turn to trustees for assistance. And this isn’t a bad idea in theory. Why start retirement owing more that you can afford to pay? The only problem is that, without understanding the process in detail, many turn directly to those trustees, rather than to a representative.
Why is this an issue? Bankruptcy trustees are looking out for the interests of creditors, not just the person filing. However, a personal representative, one with the debtor’s interests in mind, can ensure protection throughout the process, lessening the risk.
If you are worried about debt in your retirement years, a fresh start thanks to filing for bankruptcy may just be the answer. Just make sure that you are protected. Call DebtCare today. We represent you – not your creditors, and can work towards a fair and objective result. 1-888-890-0888.
It is no secret that many Canadians struggle with debt. The ease with which credit is granted, followed by the difficulty in trying to resist the temptation to buy what we perhaps can’t necessarily afford, means that Canadian consumer debt seems to continually grow, even when we are continually cautioned.
With this consumer debt comes the need for debt relief. Debt relief can take many forms, some more well-known than others. This week we are looking at one of the most popular forms, the consumer proposal, and answering a common inquiry: what is a consumer proposal.
Similar to a bankruptcy, a consumer proposal is a legal solution for dealing with debt. That being said, it is not a bankruptcy, and in many cases individuals find consumer proposals to be better when it comes to assets. For example, many people who opt for consumer proposals are able to keep their homes or cars.
So, what is a consumer proposal? When you are in debt, and can’t seem to get any traction as far as paying it off, you may choose to make a proposal to your creditors, based upon an income and asset calculation. This is a consumer proposal. In this proposal, you offer to pay creditors either all or a certain percentage of the debt owed, monthly, over a term of typically 4-5 years. The amount of your proposal is based upon your income/assets and your ability to pay.
Once this proposal is presented to your creditors, they have a finite period of time to vote to accept or reject it. Once accepted, this becomes a legally binding contract between you and your creditors, and you begin making the monthly payments.
Benefits of a consumer proposal:
A consumer proposal is a legal solution, one covered under the Bankruptcy and Insolvency Act, and while it is not a bankruptcy, it is administered by a trustee.
Something to keep in mind: a bankruptcy trustee is an administrator who earns money based on the size of the proposal negotiated. They do not represent you – they are a court appointed officer with a job to ensure that you make a proposal that is a win for your creditors. This can be confusing because many trustees advertise solutions as though they represent you, when in fact they are more subjective than that, and often working for their own best interests.
A proposal is a good solution, but you should not make one through a trustee unrepresented. A representative represents you so you can speak openly without consequence. A representative can negotiate the deal on your behalf with the trustee, and can often negotiate a more competitive deal than had you gone directly to the trustee.
So, what is a consumer proposal? A very viable debt relief option – but one that you should know all about before contacting a trustee. Call DebtCare today – we represent you, not your creditors. 1-888-890-0888.
The only type of wage garnishment that is not issued by the court is one that relates to government debt, like debt to CRA, or other less common debts, like debts related to EI overpayments.
Where CRA garnishments are concerned, if you owe money, CRA can issue a wage garnishment without notice to you and without a court order. The wage garnishment could be up to 50% of your earnings. Once your employer is served with a wage garnishment from CRA they have to honour it or they too could get stuck with responsibility for your tax debt.
Wage garnishments are very embarrassing and often CRA finds out where you work and where to serve them because you gave them this information. Oh yes….remember that nice CRA agent who phoned and said that if you filled out some financial forms including where you work that you could make a payment plan for 3 months. Only the payment plan you agreed to was more than you could afford and Bam! Wage garnishment.
Once a wage garnishment is put in place by CRA you have 4 options:
1. Pay the tax debt – beg, borrow, steal to get the money (we were kidding on the steal option – the other 2 are viable). Perhaps you can refinance your mortgage or borrow the money from your family. This still leaves a debt outstanding but at least your creditor is not the government.
2. Ask CRA to reduce or remove the wage garnishment – we wish you good luck with this option. Likely this option will lead to you divulging more information to CRA for them to use against you. In all seriousness, CRA agents are very skilled at what they do – if you plan to try to negotiate directly with CRA, it is best to do so through a seasoned financial professional who is experienced at dealing with them!
3. Go to tax court – if you can’t pay the debt in full it is highly unlikely, especially with your shiny new wage garnishment, that you can afford to go out and get a lawyer. Tax court is not like what you may remember from Peoples’ Court – it is not a good idea to go to tax court without a lawyer. You will be going up against a trained CRA lawyer who works in the tax court daily and knows the law intimately.
4. Consumer proposal or bankruptcy – either option would immediately stop a CRA wage garnishment. Whether or not this is an option will depend on other financial circumstances.
The options are clear. However, where the less common government debts that arose as a result of fraud are concerned, EI overpayments being a good example, option number 4 will not work because debts that arise from fraud are not protected in a consumer proposal or bankruptcy.
If you owe CRA a debt, don’t ignore it. Seek out professional financial assistance and get that debt dealt with. DebtCare can help. Call us today at 1-888-890-0888.
Would you go on trial for murder without a lawyer? We think it is safe to assume that the answer is no! Why? Because the stakes are high and the Crown attorney is a professional appointed by the Attorney General/Minister of Justice to enforce the law. Little old you can’t go up against a trained, seasoned trial lawyer!
If you wouldn’t go on trial without a legal representative, why in the world would you ever go to a Trustee in Bankruptcy to seek help with your debt without financial representation?
Like a Crown attorney, a Trustee in Bankruptcy is an officer appointed by a government official. Their duty is to administer bankruptcies and proposals under the Bankruptcy and Insolvency Act. Part of that duty is to ensure that your creditors get the fairest possible financial outcome.
The law itself protects people when filing a bankruptcy or proposal, not the Trustee in Bankruptcy – they are simply administering legislation. While many advertise the benefits of contacting them about a bankruptcy or proposal, the law itself sets the stage for the benefits while the Trustee simply administers the process you are legally entitled to.
Part of this process means evaluating your assets, investments, income and liabilities and determining how much money your creditors receive. In instances of consumer proposals, the Trustee receives payment based on a percentage of the proposal. Some have questioned whether this model poses a conflict of interest because a larger proposal = a larger fee.
Also important is the fact that different Trustees administer files differently. While some deploy due diligence to verify the information in your application at the sign up stage, some have administration departments that do so after the fact. It is not uncommon, after a bankruptcy, for the bankrupt to receive communication from the Trustee that some information was incorrectly disclosed, meaning that you owe surplus income in your bankruptcy or that something that you thought would be protected won’t be!
Where your financial future is concerned, the stakes are too high and that is why you should never go to a Trustee unrepresented. Do you need a lawyer? No, but you definitely need an experienced financial professional to guide you through the bankruptcy or consumer proposal process.
Why is this different? Because you pay this professional directly! They are hired to represent and counsel you. Part of this counsel means working with you to structure your financial information and even bring it forward to a Trustee on your behalf. They will help you make sure that there are no holes in your application or unnecessary information that could cause you problems.
If you are thinking about a bankruptcy or consumer proposal, do your due diligence. Both are effective solutions for dealing with debt, you just want to ensure that you end up with the fairest possible terms.
For more about effective representation in the bankruptcy or consumer proposal process please contact DebtCare Canada today by calling 1-888-890-0888.
Spring has sprung and while the snow and ice may have melted, the truth may not be the same for your bank account. Having your bank account frozen is both embarrassing and can cause considerable unexpected financial problems – especially if your pay goes into the account and you have bill payments set-up on pre-authorized withdrawal.
When it comes to getting a frozen bank account unfrozen, your options depend on who froze it to begin with. Here are the most common types of frozen bank accounts:
Here are your options:
Some people are surprised to learn that a consumer proposal can actually stop CRA collection action, such as a frozen bank account, as most perceive CRA as the almighty creditor.
If your bank account is frozen, your options are clear. If there was money in the account you need to act fast as often the bank will hold the money in your account for a number of days, or if remitted to the court, the court may also hold the funds for a period of time before they are given to the other side.
Find out more about getting a frozen bank account unfrozen by calling DebtCare Canada today. We can help: 1-888-890-0888.
So you’ve made it through income tax time but you know you are going to owe – now what?
Your first step is going to be to take a good hard look at your budget. CRA will want to be paid in full so that should be your first goal. If this goal is unattainable, that means that some negotiation with CRA is going to be involved. This can be very tricky because when speaking with them, the first thing they will try to do is get you to share personal information with them that they can then use against you later when trying to collect the tax debt.
Here are some examples:
• Where do you work? = wage garnishment
• Where do you bank? = frozen bank account
• Where do you live? = property lien
In fact, the most dangerous CRA agents are actually the nice ones! Through one casual conversation, during which you are just trying to be friendly and compliant, these agents can extract enough information from you to do some serious damage. Then, after you’ve made your disclosure, they will turn around and demand a monthly payment in excess of what you can afford to pay monthly or they suggest that you start liquidating assets to pay them.
This is why negotiating with CRA directly is never recommended.
Aside from trying to charm information out of you on the phone, agents will often appear to entertain the idea of a payment plan IF you complete their financial disclosure statement. This statement basically discloses every asset, investment and income/income source you have. This is, by far, one of the most dangerous CRA forms.
If you have a tax debt that you know you can’t pay in full, your best bet is to obtain some professional guidance. Perhaps there is some way you can pay the debt and therefore negotiate, but perhaps there is not and you will require additional protection against the powerful CRA.
Most action that CRA can take can be taken without warning you, nor do they need a court order. From the point when your return is assessed to the point when your account is assigned to a collection officer is only about 3-6 months, so time is of the essence. Waiting until you are on CRA’s radar to formulate a plan is not recommended.
Get a jump start on finding a solution for your tax debt and see the light at the end of the tunnel sooner rather than later. DebtCare can help you negotiate with, and protect yourself from, CRA. Call us today at 1-888-890-0888.