When taxpayers have tax debts owing to the Canada Revenue Agency (or CRA for short) the CRA collection agents will begin to pursue legal collection action to recover the tax debts. One method that the CRA collection agents like to use to collect debt is by freezing a bank account commonly known as bank freeze.
Unexpected Bank Freeze
A frozen bank account can be extremely shocking and can cause tremendous financial stress. Many people feel frustrated when they find out that the bank has frozen all of the funds in their bank accounts. In general, however, bank freeze is a legal action aim for collection of tax debts. Taxpayers usually get pre-warning about the tax owing and potential legal enforcement actions: first you will be notified in writing that a tax debt is owed; then you will be sent another letter demanding payment of the tax debts; finally, a “Requirement to Pay” letter is issued to your bank, demanding the bank to freeze your bank accounts. Legally, the bank must freeze the bank account as instructed to be in compliance.
Damage of Bank Freeze
Once the CRA put on a bank freeze, your mortgage will for sure default and you will not be able to take money out even to buy groceries. You may have to open new bank accounts with another bank. In general, once the CRA has frozen a bank account. The credibility or trust you built over years will be compromised. The banks become cautious in dealing with you. After all, the CRA is one of the most powerful agencies in the country. Most banks will stop renew mortgages or offering credit and may even close your line of credits if you have them. Tax debts to CRA are the worst kind of debts banks want to get involved. Sometime, people with tax debts problem do take the path of filing for bankruptcy when facing the pressure of CRA legal actions.
Prevention of A Bank Freeze
If you have a large tax debt and have received tax debts notice from CRA asking for payment and your bank account has not yet been frozen by CRA, it is advantageous to act before the bank freeze occurs. Take action now doesn’t mean you need to come up with all the funds to pay off the tax debt. Acting now to get professional help to deal with your tax problem before the tax debts problems get out of control. Even if your bank account has been frozen you still have a chance to get them released. Getting a bank account unfrozen is difficult but can be achieved through various tax venues.
Call Tax 911 Now if you have just received the notice that you own taxes. We can start the process of negotiating an affordable tax payment plan. Or if your bank account has been frozen and you do not have the funds to pay, contact us. We can negotiate with CRA collection agent to release your bank freeze and coming up with a plan to deal with your tax debt. Contact Tax 911 Now at 1-877-918-2991 Today!