Still Owe Income Tax from Last Year? Avoid a Frozen Bank Account with These Tips
We are approaching the end of January, and that means that tax time is approaching. Sure, it may be a few months away, but if you still owe income tax from last year, those months can seem like minutes. Really, at this point you’re spending on borrowed time – a frozen bank account could come any day.
When you owe the Canada Revenue Agency money, they don’t wait until tax time to attack. Their strategy is simple: get the money owed, by whatever means necessary. All too often that means freezing your bank account to retrieve those funds. If you still owe money based on last year’s assessment, don’t assume that the CRA has forgotten – they haven’t. The CRA is becoming more and more aggressive each year, and there is a list with your name on it.
Great, so we’ve filled you in on the negative, how about some positive? You can avoid a frozen bank account in the following ways:
- Don’t tell the CRA where you bank! If you call to try and negotiate a payment plan with an agent, they may insist upon recording your banking information before agreeing to a plan. No matter what they say they will agree to or promise it is only an attempt to get the most information possible. Of course they can find out your banking information on their own with some legwork, but don’t make it any easier.
- Get to the tax debt before it gets to you – this is really the only way to stop a frozen bank account before it is leveraged against you. This may involve consolidating debt, borrowing money, or taking from savings – there are several financial options.
What can you do if you have a frozen bank account? If the bank has already received a notice from the CRA and your account has already been frozen, really the only way to have this lifted is to pay the tax debt.
Can you pay? If you can’t, you need to see a financial consultant to come up with a financial plan. If the CRA has frozen your account with money in it they will not easily let go of that money – no matter what that money is needed for.
Some federal government laws can protect you and force the CRA to unfreeze your bank account – these programs also stop interest and allow you to make one low monthly payment. There is no one-size-fits-all approach though, so the best thing to do is have an impartial review by your own representative.
If you are worried about a frozen bank account, or already reeling from the effects of one, call DebtCare today. We can help you figure out a plan to have it removed. 1-888-890-0888.