Imagine that you owe the Canada Revenue Agency (CRA) a lot of
money (or maybe you don’t have to imagine) and you’ve been ignoring their
collection letters and now the phone calls have begun. You decide to ignore
those calls too. Guess what the CRA is going to do next and without any further
warning? That’s right…a CRA wage garnishment!
A CRA wage garnishment is one of the most common collection
tools that CRA will use to enforce payment of your outstanding debt. CRA does
not need to go to court and get permission before issuing this powerful
document. A CRA wage garnishment can be issued at any time once your debt
becomes legally collectible (i.e. if you haven’t filed a Notice of Objection to
dispute the amount).
CRA will usually give you one written warning that legal
action will commence if they do not receive payment in full within 14 days. Once
that deadline passes, all bets are off in terms of what CRA will do next, but
whatever they do, it won’t be pleasant.
What does a CRA wage garnishment mean for you? If you are an
employee, CRA will issue this garnishment to your employer, directing them to
take up to 50% of each of your pay cheques and send it to CRA. Once the
garnishment is received, your employer has no choice but to do as CRA
commands. In addition to the financial
pain that a wage garnishment will inflict on you, what about the pain of
embarrassment? Now your employer has
been made fully aware of all your tax problems with the CRA. Word will often start to spread throughout
your company, and soon most of your colleagues become aware of your CRA
problems.
The best thing to do is to seek help before the
problem reaches the point of a garnishment. However, don’t despair if the
garnishment has already been issued! There is still an excellent chance to get
it reduced or better yet removed all together!
Make no mistake, once CRA has the garnishment in place, they are now in
a position of strength and have you at a distinct disadvantage.
This is where knowing how to properly negotiate with the CRA
collector comes in handy. The collector is playing a game – a very serious one –
but you don’t know the rules. You do have rights – and CRA cannot keep legal
action in place that causes you “undue hardship”. The key is that you have to prove to CRA what
your ability to pay is toward this debt.
If you can only afford $500/month and the garnishment is taking
$1,000/month from you, then they are violating their own collection
policies! A voluntary payment
arrangement is the way forward with the CRA, but that is easier said than done.
Dealing with a CRA collector is not a “do-it-yourself” project.
Don’t turn to just anyone to solve your tax problem. Call Tax
Solutions Canada today for expert advice from their ex-CRA and tax specialists:
1-888-868-1400 FREE.
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