fbpx Skip to main content

Dealing with Tax Debt and Canada Revenue Agency

Owing money you cannot pay the way creditors want to be paid is scary. If that creditor is Canada Revenue Agency (“CRA”) for taxes, the level of scary sky rockets.

And the heightened level of fear is well founded.

The Canada Revenue Agency has special powers under Federal Law (for all types of taxes – Income Tax, HST/GST, and even Customs Duty) that no other creditor has.

In brief, the CRA can WITHOUT warning or a hearing do any of the following:

  • Freeze your bank accounts, AND
  • Seize your assets (including registering what amounts to a unilateral mortgage on your house! – read here which assets are protected in a bankruptcy), AND
  • Seize 100% of payments due to you (known as a “Requirement to Pay” notice, sent to all your customers – and can include things like your commission income as a sales agent), AND
  • Garnish 40% of your salary/wages.

The “AND” is important, because it means that the CRA can do all these things at the same time.

And as I stated above – the CRA do not need to warn you, or have a hearing. Other creditors need a court order – so generally with other creditors you have a chance to be heard and resolve errors.

I could write a book of horror stories on cases where Canada Revenue Agency were factually wrong or too aggressive, which coupled with ignoring CRA’s collection actions, ruined people’s businesses, image at work, the reputation at their bank, their credit score, chances of getting a mortgage, etc.

Fortunately, there are remedies. In Canada there are laws to protect you against CRA mistakes, and even protect you even when CRA are correct and you do owe the money – you just cannot pay everything right now.

A.Farber & Partners Inc. has over 30 years of debt solutions experience. We use all the remedies under Federal Law to protect you, and ensure that you can do what is fair and proper in your circumstances.

Contact us for a free, no-obligation debt assessment, to review all the debt solutions that are available to you.