Category Archives: CRA Tax Garnishment

CRA Tax Garnishment

Can CRA Garnishments Be Avoided?

When there is money owed to the CRA it is likely that CRA garnishments will be used to recover the debt. There are a number of steps that will be taken and at times, you will not be informed of what is going to happen.  If there is not a response that the CRA are happy with, they will proceed to take the money from your account. CRA garnishments is a tactic that the CRA will use if they believe it is the only way they will get their money.

The CRA are not the only people who can use this method, but it is easier for them to do it. They are able to move quickly and get their money under a “requirement to pay”. As they are part of the authorities, they don’t need to go through the same process and they will already have all the evidence they feel they need to go to this stage. If you are subject to CRA garnishments, then you need to work quickly and with professional help to get the problem resolved.

You will not get a great deal of warning, so you will be relying on other people who have more knowledge than you to get you out of this mess. As soon as you become aware of CRA garnishments, you should look for someone to go through the process with you, and deal with the difficult laws as you will not be able to deal with this yourself.

If you are aware that you are going to struggle to meet your commitments, then you should contact the CRA before they place CRA garnishments on you and your salary. Working with them will show that you are serious about wanting to pay what you owe, and the fact that you have employed someone to help shows them that you want to do what is right. CRA garnishments are not pleasant and you need to avoid them if you can.

In order to avoid CRA garnishments, you should make a sensible arrangement to pay. Be realistic about what you can afford to live on as if you offer too much you may fall behind, and if you offer too little it may appear that you are not taking this seriously. A tax professional can easily help you with the process of negotiation.

If you have left things too late and find that CRA garnishments have already been issued, you still need to act quickly to try and recover the situation. There may still be the chance that arrangements can be made.  Don’t let it get this far when there are people who can solve the problem for you.

Dealing With A Wage Garnishment From CRA

When most companies or organisations want to take action against you, they will have to take you to court, but this is not the case when it comes to the CRA. They can take action without going through this process and the results of falling behind with your tax can lead to a variety of penalties. There can be a program put in place to allow you to pay, but often that option will not be given, and you will face a CRA tax garnishment.

There is no come back from this situation, as once the CRA tax garnishment is in place, you have to accept that there is going to be money taken from your salary weekly or monthly depending on how you are paid. Not only will you be unable to get them to stop taking the money, but they are unlikely to reduce the amount they take regardless of the situation it leaves you in. They will see that your debt to them over rides all others and the CRA tax garnishment of your wages will be in place until everything is paid off.

While you will struggle to get anywhere with your requests for reduced payments on your own, this does not mean that there is not a way to get help. There are companies who will know a great deal about the law and understand that there may be elements of the law that will work in your favor and allow you to have some relief from the financial burden you find yourself under.

When you consider that it is likely that the CRA will take 50% of your salary if you are working for someone else and it could be the lot if you are a sub-contractor. When you have a CRA tax garnishment your employer will be aware of it and apart from the fact that this will be embarrassing, it could also leave you in the position of having to accept unfavorable working conditions for a while as the employer knows you are in financial difficulty and not in a position to walk away.

It may seem that a CRA tax garnishment is the worst thing that can happen to you, but that is not always the case. They can freeze your bank account and then have any savings you have sent to them, or they could go as far as placing a lien on your property. A further worry is that fact that it is possible for more than one of the sanctions to be put into place.

If the bill is high enough they may decide that a CRA tax garnishment is not going to get them their money quickly enough and so do that in conjunction with one or both of the other two options. It is going to be to your advantage to employ a professional as soon as you become aware of a CRA garnishment, as the quicker they begin to help the quicker the nightmare ends.

How the CRA Collections System works?

How the CRA Collections System works?

Since 1st August, 2005, the Canada Revenue Agency (CRA) has been given the responsibility of the cra collections of tax debts which was previously being handles by the Human Resources and Social Development Canada (HRSDC). CRA collection has the accountability for tax debts that are due to HRSDC through student loans, employment insurance, old age security, employment programs and Canada Pension Plan.

When the tax assessment or a reassessment is not paid, the balances which are unpaid are drawn from the relevant accounting system and these balances turn into collection accounts. There is a distinct accounting system for each line of revenue. The lines of revenue are corporate tax, personal income tax, Goods and Services Tax (GST) and salary deductions by all employers.

CRA Collections Agency

CRA Collections agency has to recover the entire balance of tax debts or make arrangements through individual payment plans from defaulters to recover the tax debt within a specified period of time. Recourse to legal action is taken when the defaulters are not able to arrange the filing of their tax returns. The kind of legal actions that can apply include certification of the debt in federal courts, garnishing of wages and accounts receivables, placing a lien on the assets of the taxpayer, setting off the tax debt against other government payments and seizing the assets of the taxpayer.

CRA Collections Agency can also take the tax defaulters and debtors to court in order to collect the debt which has not been paid. The procedures used by CRA Collections agencies to collect the outstanding tax debt amounts could be a combination of both automated and manual intervention. The CRA collection procedures may involve sending computer-generated letters, making reminder telephone calls, organizing field visits by the agents and sending legal notices.

The CRA collection activities take place through the Revenue Enforcement Management Information Tracking System (REMITS). This is done through a national collection call centre in the capital city of Ottawa and at eight other locations that organize collection for personal tax and Goods & Services Tax. The mode of collection will be determined by CRA collection authorities depending on the complexity as well as the size of an account.

REMITS of CRA collections arranges letters to all the tax debtors and takes care of specified accounts for which prior arrangements have been made. The call centre of CRA collection is responsible for outbound calls principally to those tax debtors whose outstanding amounts are below a specified dollar limit. The call centre is equipped with a telephone calling system which enables it to dial out to taxpayers automatically. The national pools make these outbound calls not considering any specific geographic boundaries for both individual tax and the Goods & Services Tax below a specified dollar limit.

CRA collection pools also conduct restricted enforcement actions such as garnishing the wages or accounts receivables of the taxpayers. The Tax Service Offices handle the more complicated accounts and conduct a range of legal enforcement like the seizing of assets or placement of liens on the properties of the tax defaulters.

An Overview of a CRA Bank Freeze

Once a tax debt is established, the CRA can take legal action and certify that debt in federal courts. This will be done after several requests by phone and in writing to the taxpayer. If there is no tax payment plan proposed by the taxpayer, it will empower the CRA to attack your assets as lien against your tax debts. The seizing of your assets may begin with a CRA bank freeze.

When you open a bank account in Canada, you are asked to furnish a Social Insurance Number, confirming that you are a resident of Canada. This number is used as a database which the CRA taps into to determine the details of your bank and your accounts. The CRA also keeps this data through any cheques you may have sent to the agency towards tax payments in the past. People also sign up for reasons of tax refund deposits or social benefit payments. There are various ways that the Agency can use to find out methods of your bank details and affect a CRA bank freeze.

Once your tax arrears have been certified by the CRA, they have the full power to the funds you hold in your bank accounts. CRA sends a Third Party Requirement to Pay (RTP) letter to your assigned bank. Once the bank gets this letter, they have to surrender the money to the CRA as a requirement for the sum as indicated in the letter. Your bank account is free for you to use once the required amount is sent to the CRA by your bank and the CRA bank freeze is released.

If the balance in your bank account is less than the sum demanded in the letter, the bank has to forward the entire sum in the account as on the date it receives the RTP. All deposits made to your account after this date will be forwarded also to the CRA until the sum demanded is paid in full.

If the CRA is not aware of any other bank account of yours, that particular bank account will not be affected by the CRA bank freeze. If your bank account happens to be a joint account where another person is also operating at the same time, you still face a CRA bank freeze for that account and the bank will be forced to honour the demand as per the RTP. It is, therefore, not a good idea to have a joint cheque account in a bank for any mortgage or insurance deductions when you feel that there may be a risk of a CRA bank freeze.

The CRA is empowered to affect a CRA bank freeze only to those bank accounts that are pertaining to you. It cannot freeze the bank accounts of your spouse or any other relations. The use of a credit card that has been issued by your bank does not get affected by the CRA bank freeze because the card is actually issued on behalf of Visa, MasterCard or American Express. A bank account RTP is limited only to that bank account. In very rare cases where there is a huge amount of tax funds as default, there is a possibility that the CRA bank freeze may also spread to other credit lines of yours.

CRA Garnishment Toronto

What is garnishment?

Garnishment is a legal process by which a creditor can reach a third party to receive what the debtor owes him. If someone in Toronto fails to pay the money he owes, the creditor can go to a court for garnishment order against the debtor.  They can legally seize debtor’s money in his bank account, his salary or even other money he own in order to repay the debts.

Does a Toronto creditor always require court order?

The Toronto creditor does not require a court order if the debtor is in assignment of wages to credit union; or if the debtor owes unpaid taxes to the Canada Revenue Agency or CRA. The Canada Revenue Agency may directly notify debtor’s employer and may ask for immediate starting of CRA garnishment Toronto.

What does wage levy mean?

The wage levy is an enforcement action that is initiated by the CRA against someone for the purpose of unpaid taxes. It is just like the wage CRA garnishment Toronto.

What happens if there is a wage levy or wage garnishment?

If there is a CRA garnishment Toronto or a wage levy the employer will receive a garnishment order to withhold the specified amount from the wages of debtor.

In Toronto, what is the maximum amount for garnishment by a creditor?

The maximum amount for CRA garnishment Toronto is 50% of debtor’s gross monthly wages. However, if CRA puts a bank levy in addition to a wage garnishment, it can sometimes amount to 100% because the remaining 50% deposited in bank accounts will be taken away by the CRA.

What are the exceptions from CRA garnishment Toronto?

The social assistance and employment insurance cannot be garnished in the event of the CRA garnishment Toronto.

What is the process of garnishment?

A creditor has to apply to a court for garnishment. He will have to get the judgment order from court validating the debts and then will have to get the enforcement order for garnishment. He can also hire companies that will investigate debtor’s income and public documents for any property ownership. If the debtor has sufficient funds the creditor may initiate the CRA garnishment Toronto.

How can I stop CRA from garnishing my wages or seizing my bank account?

Anyone can have financial issues that may leave him unable to pay his taxes within the required period of time. You can always contact us to seek reliable and professional advice. We will guide you in the best possible way and will negotiate on your behalf with the CRA. We can get you such a payment plan that is in accordance to your capabilities. We can settle lower monthly payment plans for you with a little or no interest charges. You can always rely on us to stay protected against the CRA garnishment Toronto.

Dealing With A Bank Freeze by Canada Revenue Agency

 

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!

CRA Tax Payment Plan Negotiation

When do you need a CRA Tax Payment Plan?

When taxpayers owe taxes and do not deal with promptly, not only will they be putting themselves in serious trouble, but they will also see the amount of money that they owe rapidly increase due to daily compounding interest charges and penalties.

The CRA has many ways to retrieve the tax owing and the CRA will not hesitate to follow through on aggressive collections practices even take legal actions against taxpayers in the absence of a CRA tax payment plan. The CRA can put liens against a delinquent taxpayer’s property, they can direct sheriffs to sell taxpayers’ assets, freeze taxpayer’s bank accounts or they can garnish income. Dealing with taxes owing or negotiating a CRA tax payment plan with aggressive CRA collection agent can be intimidating for anyone.

Why get professional help with the CRA tax payment plan?

Neglecting to pay taxes is a serious matter. If the tax problems have been a lingering problems for years, then the penalties and daily compounded interest alone are way too overwhelming to pay off easily, which in turn will lead to potential legal actions by CRA in the attempt to collect the taxes. For this reason, the help of a tax professional is very important.

Seasoned tax professionals will be able to perform effective negotiation on your behalf with CRA. Well negotiated CRA tax payment plan can be a good option for taxpayers who are struggling to deal with typically aggressive tax collection agents on their own.

No one will be able to get away with not paying their taxes. But having a professional on the job that can work with the CRA before a client loses property or sees their credit rating severely damaged can make all the differences.

What you need to do immediately to get a CRA tax payment plan negotiated?

If you owe large tax amount that are beyond your means and you are under stressful collection pursuing by CRA. Then it is time for you to find tax professionals to negotiate a CRA tax payment plan with the CRA collection agents before any legal actions are initiated against you.

It makes far more sense, and will be less costly, to resolve your tax problem with the tax man right away, rather than dealing with the financial burden of wage garnishment, bank levy or other penalties later.

The first step is to stop procrastinating and running. Take action today!

Hire someone who is qualified and has the experience to help you solve tax  problems. Many people try to get the CRA tax payment plan themselves, resulting in negative results.

Get a CRA Tax Payment Plan negotiated for you TODAY by calling Tax 911 Now team at 877-918-2991.

Leveraging on the knowledge and experiences in dealing with tax collection agencies in all the years, Tax 911 Now’s team of professionals has helped many clients with tax owing problems like you to negotiate CRA tax payment plans that are satisfactory to the clients who in turn shared their positive experiences and appreciation in their testimonials.

Our Free No Obligation Consultation & Rate Guarantee

To begin with, we offer first time RISK FREE unlimited time consultation just to help you to understand the depth of your tax owing problems. We will also provide you the recommended steps to take to prevent the tax problem from escalating into legal battles. It is no obligation and it is completely up to you to decide what to do from there.

Get a consultation with our experts if you are in the following cities in Canada:

  • Toronto
  • Markham
  • Vancouver
  • Calgary

If you do decide to engage us to help you with the CRA tax payment plan negotiation, we provide rate guarantee within the entire tax negotiation industry.

Act TODAY by calling Tax 911 Now team at 877-918-2991 or complete the inquiry form at top left of the page.

How To Stop and Release an Income Garnishment

Canada Revenue Agency (CRA) may collect the unpaid assessed amounts by way of garnishment. This method may be used to obtain the tax owing by tax payers for the amounts owing to CRA.

Garnishment is usually served on a third party such as a company, financial institution or individual who the CRA believes is liable to make a payment to a tax payer.

The following factors may be considered by CRA prior to commencing garnishment action:

(a) whether an amount is in dispute under the objection or appeal process;

(b) the negative impact of the requirement upon the registrant’s operations;

(c) whether undue hardship will be created for the registrant; and

(d) the payment terms associated with the requirement, where appropriate.

If you owe back taxes to CRA, CRA can garnishee your wage without a court order.

If you are being threatened with a income garnishment by CRA, you need to act immediately. Waiting longer will make your situation worse.

If without any professional help, you may have only one of the three ways to stop an income garnishment:

First, you can contact CRA and attempt to make a deal with them so they will stop the garnishment;  CRA will not make a deal with you until you have complied with the Income Tax Act filing requirement. In addition, CRA requires you to make the payment in full including the interests and penalties if applicable to remove the garnishment.

Second, you can file a consumer proposal, which immediately stops the garnishment for a short period.  CRA will make a decision on the proposal. In general it is difficult to get CRA to accept the proposal.

Finally, you could file bankruptcy in Ontario which also stops the wage garnishment. Bankruptcy is usually the last resort because it can destroy your financial credibility you built up over the years.

Under Tax Professionals’ help, you can have many more options that control the damage to your life so that you can again lead a normal life.

We are effective tax negotiators who remove income garnishment for you fast! We can remove income garnishment in days as mentioned in clients’ testimonials.

What You Need to Do Immediately to Fix Your Income Garnishment Problem?

If you feel you will be garnished by CRA pretty soon or you have received letters or calls threatening with a garnishment, then you cannot afford to wait any longer! Do something to resolve your tax problems.

It makes far more sense to address the threat right way, rather than dealing with the financial burden of wage garnishment, bank levy when you need the money most.

The first step is to stop procrastinating and running. Take action today!

Hire someone who is qualified and has the experience to help you solve tax problems. Many people try to negotiate their tax problems themselves, resulting in worsened results.

Stop the garnishment TODAY by calling Tax 911 team at 877-918-2991 or go to Contact page.

How Do You Choose Your Tax Service Providers?

The most important factors to choose your tax service provider are: a. the service provider is competent and experienced. b. the service provider genuinely cares about helping you; c. the costs are reasonable.

Having been dealing with tax agencies of all levels in all the years, Tax 911 Now’s team of professionals has helped many clients with tax problems like you to get tax settlement that are satisfactory to the clients who in turn shared their positive experiences and appreciation in their testimonials.

Be able to take care and help others and get appreciated in return makes us feel proud of what we do. Putting clients’ best interests before anything else is the core belief for Tax 911 Now.

Our Free No Obligation Consultation & Price Guarantee

To help you to move forward with your problem, we offer RISK FREE initial consultation just to help you to understand the depth and complexity of your tax problems. We will also provide you the recommended steps to take to fix your tax problems. It is no obligation and thus it is completely up to you to decide what to do from there.

If you do decide to engage us to fix your tax problems, we provide price guarantee within the entire tax negotiation industry.