Tax Grinch – You’re Not Even Safe from a Frozen Bank Account During the Holidays
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.