We can help you find a new beginning™.
Mounting tax debt is stressful and can make it difficult for you to see a clear path forward. If you’re struggling to pay back the CRA, the D. & A. MacLeod Company Ltd. team can help. Our compassionate licensed insolvency trustees (LITs) will assess your financial situation and determine the best course of action to help you resolve your pressing tax debt issues. Please don’t hesitate to contact us today for a free consultation.
If you owe money to the Canada Revenue Agency you’ll want to first learn how to pay your debt. It’s always best to pay your debt in full to avoid interest and other legal and financial consequences.
However, you can also make a partial payment. The CRA will generally apply your payment toward your oldest tax debt unless you request otherwise. Keep in mind that your debt will gain interest until you pay the full balance. Visit Make a Payment to get started.
Our team has compiled some of the most frequently asked questions about tax debt to help you determine your options.
If you fail to pay your debt or refuse to cooperate, the CRA may take legal action, which could result in serious financial or legal consequences. For example, the CRA can garnish your income, garnish your bank account, seize and sell your assets or use any other means under the laws that apply to collect the amount you owe.
Before starting legal action, the CRA must make three attempts to give a verbal legal warning by phone and send one written legal warning letter. The CRA won’t take legal action until 90 days after the mailing date of the notice of assessment or reassessment.
In some circumstances, the CRA offers tax debt provisions. This program allows qualifying individuals to have the interest or penalties on their tax debt waived under the following conditions:
Extraordinary circumstances like a natural disaster or serious illness
Actions of the CRA like processing delays or errors
Inability to pay or financial hardship like loss of employment
Remember that the CRA only forgives penalties and interest, not the underlying principal.
Income tax and other tax debts are unsecured debts. Therefore, they can be reduced or eliminated by completing a formal consumer proposal or filing for personal bankruptcy through a licensed insolvency trustee (LIT).
Although declaring bankruptcy will eliminate all your tax debt, it may require you to surrender some of your non-exempt assets On the other hand, a consumer proposal allows you to pay off your debt, either by making smaller payments than what you owe or giving you more time to pay it off.
A licensed insolvency trustee from D. & A. MacLeod Company Ltd. can help determine which option is best for you. You can count on us to address any of your concerns and ease your stress.
If your tax debt is causing you financial hardship and a spiralling debt snowball, the team at D. & A. MacLeod Company Ltd. can help. Our licensed insolvency trustees are experts in negotiating with the CRA and eliminating tax debt through either a consumer proposal or personal bankruptcy.
Contact us today to learn more about our services or schedule a free consultation. We have offices in Brockville, Cornwall, Kanata, Kingston, Ottawa, Pembroke and Smiths Falls, and virtual appointments anywhere in Ontario. We’re committed to helping you find a new beginning™.