With another year’s tax deadline to pay now passed, Licensed Insolvency Trustee and President of Sands & Associates Blair Mantin joined Global News to share some key facts Canadians should know about tax debt, and what you can do if you can’t pay your taxes and need help.

What if I Can’t Pay my Taxes?

Learn some key facts about having a debt with Canada Revenue Agency that you should know if you’re unable to pay your income tax balance.

1. Not Filing and Paying Taxes on Time Can Cost You…Daily!

If you were among the filers unable to pay their income tax balance in full before this year’s deadline, unfortunately your balance is going to grow. CRA’s add-ons to tax debt can make even a modest balance balloon very quickly with:

• Compounding daily interest on the unpaid latest balance owing.
  • Interest can also be applied to unpaid instalment requirements, GST remittances and more.
• Late filing penalties if your return is not filed on time and you have a balance owing. For example:
  • In 2021 most people had until April 30^th to file and pay their 2020 returns, with self-employed individuals having until June 15 to file, although they still must have paid the balance owing by April 30^th.
  • Late filing penalties started at 5% of your 2020 balance owing plus an additional 1% for each full month you filed after the due date, to a maximum of 12 months.
  • Late filing penalties may be charged at double the rate if you’re a habitually late filer – a 10% penalty plus 2% interest per month – making this tax debt even more expensive than many credit card interest rates!
• Even if you’re unable to pay your balance in full, filing as soon as possible still helps you avoid ongoing late-filing charges.

If you don’t owe anything on your income tax return, it’s always in your best interest to file. Being able to prove your income for credit or housing applications, and receiving benefits such as GST, GIS, Canada Child Benefit etc. are all reasons (besides fulfilling what CRA views as your obligation) to get your tax return filed on time.

2. Your Tax Debt Does Not Expire

Although you may be able to avoid your balance owing for a period, for most people unpaid income tax debt will catch up to them eventually!

Unlike some types of common consumer debts that are subject to a statute of limitations you can’t “wait out” money owing to government bodies like CRA for tax debt or student loans. These debts are not subject to the basic two-year liability limitation period that stops other creditors (such as credit card issuers) from taking legal action against you for unpaid debts under BC’s Limitation Act.

Learn More about BC’s Statute of Limitations on Debt

3. Your Employment Income and More is at Risk

Normally CRA will not start legal action until 90 days after the mailing date of your Notice of Assessment / Reassessment, and CRA’s legal warning about action being started against you normally consists of:

• 1 attempt for a verbal legal warning by telephone
• 1 written legal warning letter being sent

In some cases however, CRA is not required to inform you of actions it is taking. Whether you have advance notice or not, CRA is a powerful creditor and if you have unpaid tax debt (or even unfiled tax returns), they can implement severe collection action virtually overnight.

Other types of creditors may not be able to impact certain income sources when it comes to wage garnishments or asset seizures but CRA can resort to attachments on wages due to you from your employer (as much as 100%!) as well as:

• Self-employment or sub-contractor earnings from your clients.
• Pension and EI benefits (CPP, OAS).
• Rental or lease income from your tenants.
• Personal property such as your bank accounts, home, investment and insurance proceeds.

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– Jayvee Lester De Castro

I highly recommend Sands and Associates especially Jennifer Thom. If you have problem with you debt. She will give you the best options and support throughout the process. – Jayvee Lester De Castro – 1 day ago 

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– Jarrod Barratt

I’ve been having financial hardship for quite some time now and I am pleased I reached out to Sands & Associates recently. They were very quick to get started on helping me with relief and I never once felt judged in the process. Omer and Jennifer were very polite and informative in the process and I thank you very much for your help and support. I would recommend Sands & Associates to anybody looking for some flexibility in their financial struggles. – Jarrod Barratt – 2 days ago 

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I found Jennifer Thom to be very helpful and friendly going over my options to get my debt dealt with. I felt welcomed without judgment and she made my stress and anxiety lessen which was huge for me. Thank you for your help and I look forward to a new future where I can be in control and not worried about how I’m going to survive debt. All the best. Will recommend. – All the good things – 2 days ago 

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– Saba N.

Sandra was amazing from start to finish with my consumer proposal. From answering questions and getting back to me in a timely manner when I knew she was very busy, the process was quick and painless. Paying this off will be great and then I can build up my credit again! Thanks again, Sandra ♥️ – Saba N. – 2 days ago 

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– Ali D

I went to Sands & Associates because I was overwhelmed with my debt and had no idea what to do. Camille helped me set up my consumer proposal, and honestly, she made the whole process so much easier than I expected.

She explained everything clearly — what a consumer proposal is, how it works, what my monthly payment would look like, and what debts would be included. She never made me feel embarrassed or judged, just supported.

Because of her, I finally feel like I have control over my finances again. She walked me through every step, answered all my questions, and made sure I fully understood what I was signing up for. I’m so relieved and grateful.

If you’re thinking about a consumer proposal or just don’t know where to start with your debt, talk to Camille. She’s patient, caring, and really knows what she’s doing. Highly recommend! 🙌 – Ali D – 2 days ago 

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– Shubham Batra

I had an exceptional experience with Sands & Associates during one of the most stressful periods of my life. I was overwhelmed, anxious, and unsure of where to turn, but the team treated me with genuine care and understanding from the very first moment.

Helen was absolutely amazing, patient, compassionate, and incredibly knowledgeable. She made everything easy to understand and helped me feel supported at every step. Hashan was also extremely helpful and kind, always quick to respond and guiding me with professionalism and empathy.

Thanks to both of them, I finally felt relief and clarity during a really difficult time. I’m truly grateful for their support and highly recommend Sands & Associates to anyone who needs trustworthy help and real compassion. – Shubham Batra – 2 days ago 

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– Emilee Stonehouse

I am very happy I got to work with Sand & Associates. It has been making life so much easy dealing with the debt I had. Plus working with Dana, and everyone there has been a delight to move things forward and easier. Thank you Sands & Associates! – Emilee Stonehouse – 3 days ago 

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– Jenna Sullivan

Working with Carolyn was an absolute relief. From our very first conversation, she made what could have been a stressful situation feel manageable and even hopeful. She explained everything clearly, answered all my questions with patience and understanding, and made sure I felt supported every step of the way. Her professionalism and compassion made a huge difference, and I’m incredibly grateful for her help. I would highly recommend Carolyn and Sands & Associates to anyone who needs guidance and wants to feel truly cared for through the process. – Jenna Sullivan – 4 days ago 

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– Deep Brar

I can’t thank Sands & Associates enough, especially Jagdip Dial, for helping me through one of the most stressful times in my life. I was buried under debt and didn’t know where to turn, but Jagdip treated me with genuine kindness and respect from day one.

He walked me through every detail of the consumer proposal process, explained everything clearly, and never once made me feel judged. Because of his patience and guidance, I finally feel like I can breathe again and start rebuilding my life with confidence.

If you’re struggling with debt and feeling hopeless, please reach out to Jagdip and the team — they truly care, and they’ll help you find a way forward. – Deep Brar – 4 days ago 

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4. Tax Debt Forgiveness is Possible

There is hope for those dealing with tax debt! Contrary to what many Canadians may believe, if you find yourself facing an unmanageable CRA debt there are in fact two solutions that can allow you to have virtually all types of CRA debts forgiven/written-off, including income taxes, business GST and more – in addition to any other consumer debts you may have.

Both options can effectively help you deal with your debts and stop actions such as wage garnishments and accruing interest and penalties:

• Consumer Proposals: A unique consolidation and settlement solution that allows you to cut your consolidated debts down to an amount you can afford to repay, with the unpaid balance written-off by your creditors. No borrowing is required, and no further interest charges are applied.
• Bankruptcy: If your situation leaves you unable to afford any meaningful repayment towards your debts, filing for bankruptcy can allow you to have full forgiveness for virtually all your debts. The process often lasts as little as 9 months and is generally quite private and straight-forward.

In Canada, these debt management strategies are accessible only by working with a qualified Licensed Insolvency Trustee. There is no cost to connect to discuss your situation and evaluate all your options, and no referral is necessary.

Additionally, BC residents can get help from a qualified Licensed Insolvency Trustee and request services and support remotely, without needing to leave the comfort and convenience of home.

Get your plan to be debt-free, connect with a caring, non-judgmental debt help professional from Sands & Associates – book your free confidential debt consultation today.

The post 4 Facts About Tax Debt – Where to Get Tax Debt Help appeared first on Sands & Associates.

Sands & Associates Licensed Insolvency Trustee Blair Mantin joined BT Vancouver to talk about one of the biggest impacts consumers feel with a financial problem, when debts are piling up – debt-stress – and to share insights to help British Columbians manage the emotional side of money.

Watch the clip here and read more below:

Common Debt-Stress Impacts

Debt-stress can manifest itself severely, and in fact ‘overwhelming stress’ was one of the top indicators for participants in the 2019 BC Consumer Debt Study to realize that their debt was becoming a problem. Additionally, the study found that:

• Nearly 90% of respondents said they experienced a constant or daily worry about their debts or general finances.
• Many people said they were sleeping poorly, having arguments with their spouse or partner about money, and alienating themselves from family or friends.
• Over 70% said their self-esteem suffered because of being in debt, and 65% said their health suffered; many also felt their family or children, and job performance suffered.
• Anxiety or depression was cited as a debt-stress impact by 77.1% of respondents.
• Nearly 1 in 5 people even said the stress of their debt resulted in them experiencing thoughts of suicide.

You are not alone! Non-judgmental support and debt solutions are available from professionals at Sands & Associates. Connect with a debt help specialist today.

Get More Insights from the 2019 BC Consumer Debt Study

Tips to Manage Debt-Stress

If you are beginning to feel stress or anxiety about your finances, one of the first things you can do to try to regain control and make positive changes is to:

1. Identify and Acknowledge Your Debt Stress Triggers

Is there a specific aspect of your financial situation that is causing you worry? Some people might be stressed about a credit card balance that keeps growing, or a bill they cannot seem to pay off.

• Try to identify what specifically you are worried about and recognize what is triggering the stress for you – this also gives you some idea as to what needs to be addressed to solve the challenge.

Consider how you cope with this stress so you can be on the lookout for and avoid unhelpful (or further aggravating) coping habits. Some common areas to watch for might include:

• Are you avoiding looking at your bills? Hiding account balances from your spouse or partner?
• Turning to coping strategies like overeating, substance abuse, overspending or gambling?
• Neglecting your health or “punishing” yourself with negative self-talk or behavior?

2. Put Plans in Writing and Keep Track

Many people do not have a written personal budget or overall financial plan to refer to. Take some time today to get in “paperwork shape” and restore some feelings of control – this will help you manage your money more efficiently by avoiding the stress of “the unknown” and simply guessing. Start by:

• Listing all your debts, with account balances, account numbers and the payment requirements;
• Ensuring you have a realistic household budget that balances, and commit to sticking to it; and,
• Keeping track of your income, and your actual spending.

If you have a spouse or partner get them involved in this planning too. Many people are surprised to learn just how much their spouse has been shouldering alone when it comes to organizing the household finances; it’s important to get on the same page, and have financial goals you can work towards together.

Remember: No one is born with money management skills – these things take time to learn and understand (and often some trial and error).

Read some Frequently Asked Questions about your Spouse Filing for Bankruptcy

3. Tackle Other Financial Items One Step at a Time

As you move towards new habits, take note of other lingering financial “to do’s” that can cause anxiety. Do you have any financial-related tasks you are always meaning to get to? Common examples include:

• Overdue tax returns that should be filed;
  • Bump outstanding tax filings up your priority list – you could be missing out on benefits you are entitled to, or risking Canada Revenue Agency to prompt you to file.
• Looking into life insurance or setting up a Tax-Free Savings Account (or other retirement plans); and,
• Having a will written.

Keep track and celebrate your progress as you get these (often long-lingering) tasks completed. This will help you to keep up the momentum and sense of accomplishment.

Learn About Solutions for Having Government Debts Forgiven

4. Seek Professional Assistance

Many people prolong debt-stress and anxiety because they delay seeking professional debt advice, trying instead to manage on their own. Some other common reasons people postpone getting debt help include:

• Feeling ashamed of needing help with financial commitments;
• Worry about being judged, or feeling embarrassed to ask for help; and,
• Thinking there is no solution to their situation, or not knowing where to seek help.

Licensed Insolvency Trustees are the one debt help professional legally empowered and endorsed by the government to offer advice about your situation – and solutions to deal with debt for good. There is no cost to connect to get direction and talk about how you could move forward financially, and it could take less than an hour to get your debt-free plan.

Whether you are starting to worry about your debts, have felt underwater for some time, have a “perfect” credit score or are facing collection actions – we are here for you, without judgment.

We often have consultations with people who ultimately don’t require professional debt solutions but finding out about another avenue of debt legislation or even just professional confirmation that they’re on the right track gives them the support and tools they need to move forward financially. Knowing is not owing!

Connect with a caring Sands & Associates representative and get a plan to be debt-free today. Book your free debt consultation now.

The post Tips to Help Manage Your Debt Stress appeared first on Sands & Associates.

Vice-President at Sands & Associates and Vancouver Licensed Insolvency Trustee Blair Mantin visited Breakfast Television Vancouver to share four key tips to help you keep your tax time as stress-free as possible.

Watch the clip here, and read more below:

Tips to Have a Stress-Free Tax Time

Know the Rules

Every year Canada Revenue Agency (CRA) makes changes to tax brackets and tax credits. Before you get filing, spend a few minutes finding out what’s changed – knowing the ins and outs could get you some extra money!

• This is especially worthwhile if you’ve had a financial change (like a new job where you need to supply your own tools, or if you’ve had a change in dependents).
• Don’t try to “outsmart” the system by making claims that are wishy-washy, or that you don’t have proof of. Audits can and do happen!
• Avoid falling for tax scams! Every year Canadians get caught up in “too good to be true” deduction scams and don’t realize what’s happened until it’s too late.

If you don’t have an accountant doing your tax return, you can brush up on changes by visiting the CRA website. Some notable changes for 2018 tax returns:

• A medical expense tax credit for service animals: In some circumstances, the cost of caring for a service animal can now be claimed as a medical expense.
• Accelerated Investment Incentive: This temporary new measure impacts self-employed individuals and their capital cost allowances rates.

Get It Filed

CRA doesn’t take kindly to Canadians who don’t file their tax returns. It’s actually worse in CRA’s eyes to not file a return than to owe them money! CRA has been known to issue ‘arbitrary’ assessments with big balances owing to prompt ‘non-filers’ into getting their tax returns done.

This is still true even if you’re already carrying an old CRA balance. Not filing your tax return isn’t a good strategy to avoid adding to your bill – you’ll likely just aggravate your stress-levels!

• For most Canadians the deadline to file your 2018 tax return is April 30th.
• If you owe money, you’ll also need to pay your balance by this time.
• If you’re self-employed, the date you need to file your return by is June 15th – but you still need to pay by April 30th.

Late-Filing Penalties

If you owe money for 2018 income taxes and your return is filed late, CRA charges a late-filing penalty of 5% of the balance owing, plus 1% of your balance owing for each full month the return is late (to a maximum of 12 months).

If you habitually file late, the penalties can increase. If you were charged a late-filing penalty on your 2015, 2016 or 2017 returns then your 2018 late-filing penalty may be 10% of your 2018 balance owing, plus 2% of your 2018 balance owing for each full month the return is late (to a maximum of 20 months).

Even if you’re unable to pay the balance you owe by April 30^th, you can avoid these penalties by filing your tax return on time.

Be Balance Smart (If You’re Getting a Refund)

Plan to use your tax refund well if you’re getting money back. Remember, it’s not really free money – it means the government was “holding” money from your income that you overpaid to them throughout the year.

• Consider how the refund could benefit you the most:
  • An extra payment towards your debts;
  • Savings or RRSP contributions;
  • If you’re going to splurge with the cash be sure you only do it once!

Pay What You Owe (and Plan Ahead)

When you owe money for taxes make sure you pay your balance owing in full ON TIME. Interest for tax debt compounds daily, so even a “reasonable” amount can snowball very quickly.

Tax Balance Interest

If you owe money for your 2018 income taxes, CRA will charge compound daily interest starting May 1^st on unpaid amounts. Compound daily interest will also continue to be charged on outstanding amounts owing from prior tax years. CRA will additionally charge interest on late-filing penalties, starting the day after your return should have been filed.

The interest rate charged by CRA can change every 3 months, the rate in effect from January 1 to March 31 (2019) for overdue taxes, CPP contributions and EI premiums is 6%.

To avoid owing next tax time, understand what caused the balance; some common causes may include:

• Working more than one job
  • Your combined income may require more tax to be paid. Consider asking one employer to withhold extra tax going forward.
• Receiving EI benefits in the same year as receiving employment income
  • EI benefits frequently don’t have sufficient tax withheld. Try to stay ahead by asking an employer to take a bit more tax off your paycheques or making an instalment payment to CRA during the year.
• Self-employment income
  • Being your own boss can have a few drawbacks, one of which is that you need to pay your own CPP and tax! Get into the habit of making regular instalments throughout the year to avoid a big tax bill hitting all at once. You can use free online calculators to estimate how much you should be putting aside.
• If what you owe is beyond your ability to pay, or your balance has accumulated to an unmanageable amount, speak with a Licensed Insolvency Trustee.
  • A Consumer Proposal can negotiate, reduce and write-off your consumer and business debts – even debts for income taxes, GST or payroll remittances;
  • Filing bankruptcy can also give you forgiveness for consumer and government debts.

Get a financial fresh start today – book your free debt consultation to meet confidentially with a local Sands & Associates debt expert. We’re here to help you understand your options and choose your best debt solution.

The post 4 Tips for a Stress-Free Tax Time appeared first on Sands & Associates.

Q:  Can a Licensed Insolvency Trustee help with government debts?

A:  Absolutely!  Many people are surprised to learn that besides a bankruptcy, a Consumer Proposal is the only mechanism in Canada that can be used to reduce or eliminate government debts such as income tax debt, GST debt and student loans.  Other debts such as ICBC debt and MSP debt can also be resolved using a Consumer Proposal or personal bankruptcy.

Additionally, both will also halt all collection attempts, including wage garnishments and bank account seizures – and interest is frozen by law.

It’s important to know that Licensed Insolvency Trustees are the only people legally empowered to provide these options in Canada.  No referral is required and confidential consultations are always free of charge.

To find out more about your debt options, call us at 1-800-661-3030 or contact us here to arrange for your free, confidential consultation.

The post Can a Licensed Insolvency Trustee Help with Government Debts? appeared first on Sands & Associates.

$1,000 minimum: Here’s a number that often surprises people – $1,000 is the minimum amount a person needs to owe in order to file a bankruptcy. While it’s uncommon for someone owing $1,000 to make a bankruptcy assignment, each person’s situation is unique and sometimes a $5,000 debt load can be just as unmanageable as a $75,000 one.

No income cap: Whether you’re earning $500 or $5,000 a month, bankruptcy still may be an option for you to resolve your debts. Household income is used to determine the length of time a person will be in bankruptcy (9 months or 21 months for most cases) and also what they would have to pay on a monthly basis (surplus income). For those earning enough to comfortably pay something towards their debts a Consumer Proposal may be an alternative, but if unsuitable for other reasons, a person’s wage does not prevent them filing for bankruptcy.

Your credit will recover: Filing for bankruptcy does not mean you’re forever unable to get credit.  In fact, during the time a bankruptcy is reflected on a credit report (6 years from the date of discharge in a first-time bankruptcy) it is still possible to apply for and receive credit. The vast majority of individuals who claim bankruptcy do move on to get mortgages, credit cards, vehicle loans, lines of credit etc if they choose to. Your bankruptcy will not be a ‘life sentence’ with respect to future credit.

You can own assets: There is no provision under bankruptcy legislation that strips bankrupt individuals of their assets – quite the opposite! When filing for bankruptcy there are a number of assets that are exempt from seizure and most people retain all of their assets. Even if you own something that is not considered exempt it does not necessarily mean that you would be required to part with it; quite often people will repurchase the value of the item to the trustee in order to retain it.

Yes, it covers… Some of the most common things people assume bankruptcy doesn’t cover such as: debts with Canada Revenue Agency, student loans (if you’ve been out of school for at least 7 years), outstanding MSP premiums and debt due to gambling are in fact relieved. Most debts are dischargeable through a bankruptcy, although there are some exceptions which include: court imposed fines, alimony and maintenance payments, money owing for things stolen and property obtained through false pretenses. Bankruptcy is targeted at the ‘honest, but unfortunate debtor’. As long as you can comfortably say that you’ve been honest in your dealings, bankruptcy will allow you to start again fresh.

While we hope that this has helped to clear up any misconceptions, the bottom line is that if you’re looking for real solutions to debt problems it’s best to check with a reputable professional in that field (in this case a Trustee in Bankruptcy). After all, the only way you’re able to make solid decisions is with all the facts at hand, not fiction.

Find out if bankruptcy is the best debt solution for you – book your confidential free debt consultation with a caring, non-judgmental debt expert from Sands & Associates today. 

The post 5 Things You Didn’t Know About Bankruptcy appeared first on Sands & Associates.

DO:  Ask for help filing your return if you feel it’s beyond your paperwork skill-set.  If your return is basic and consists of a T4 or two, chances are you could file it yourself without missing out on credits.  For people who are self-employed or who have more complex finances, it’s a good idea to have reputable bookkeeper or accountant check over your return to make sure you’re getting all the benefits you may be entitled to.

DON’T:  Try to “outsmart” the government by making claims that are uncertain.  If you are eligible for certain deductions or credits, by all means use them, but be wary of write offs that seem too good to be true – they probably are.  Recent charitable donation schemes for example, have left many taxpayers with a large bill on their hands.  As cautioned above, if you’re unsure – ask a reputable, qualified professional first.

DO:  Look at why there is a balance owing and try to correct this going forward.  If there’s more tax due this year because you withdrew from your RRSPs or you have more than one job and aren’t having enough tax withheld at source, make note and either set aside more throughout the year, or better yet ask one of your employers to remit a little more each paycheque.

DON’T:  Stop filing altogether because you think you’ll be continually adding to the balance.  Not filing returns for a long period of time can result in many other problems, such as a back-log of MSP premiums due, and not receiving Child Tax or even GST benefits that your family may be entitled to.  Allowing returns to pile up year after year isn’t likely to help in the long run, and eventually it will probably just mean lost sleep down the road.

DO:  File AND pay on time.  Balances due must be paid on or before April 30^th each year, and unless you or your spouse was self-employed your returns should be filed by then as well.  Late returns can mean accumulating interest unnecessarily, as well as fines and penalties.

DON’T:  Ignore the bill if you owe.  Canada Revenue Agency is a powerful creditor and disregarding the balance owing you may have can result in serious collection action such as bank account seizures or even a garnishment of your pay.

DO:  Be aware that there are two options for dealing with unmanageable tax debt.  Both a consumer proposal, or bankruptcy can eliminate or reduce tax debt, more importantly they are the only options that can.  If you find yourself in a position where the debts are out of hand, speak with a licensed trustee about your situation, they are legally empowered to assist you with Canada Revenue Agency debts.

As the expression goes, two things in life are certain – death and taxes – while we can’t control one, we can certainly help guide the other!

To speak confidentially with a BC Licensed Insolvency Trustee in your area, please contact us for a free debt consultation.

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