CRA Sending Debt Letters

Handling Debt Letters from the CRA: A Comprehensive Guide

If you’ve been on the receiving end of debt letters from the Canada Revenue Agency (CRA), you know the fear and anxiety they can invoke. This guide will help you understand why you’re getting these letters and what you can do about them.


It’s common for Canadians to feel overwhelmed and panicked when they receive debt letters from the CRA. This is because unlike other creditors, the CRA can take drastic measures like freezing your bank account or garnishing your wages without a court order. If you’re in this situation, don’t panic, we’re here to help.

Why Am I Receiving Debt Letters from the CRA?

Typically, the CRA sends debt letters when you owe money that has not yet been paid. This is often due to tax debt. According to data, many Canadians have experienced tax debt at some point in their lives. However, there are pathways to settling your tax debts, which we’ll delve into later.

The Consequences of Ignoring CRA Debt Letters

Ignoring CRA debt letters can have serious consequences. The CRA can take several actions to recover the money owed, including:


  • Garnishing wages;
  • Freezing bank accounts;
  • Seizing investments;
  • Placing liens on homes.

These can have a significant impact on your life, so it’s essential to address the situation promptly.

What if My Debt Letters are About CERB Repayment?

Due to the COVID-19 pandemic, many Canadians were forced to apply for the Canada Emergency Response Benefit (CERB). However, some Canadians received CERB without meeting the eligibility criteria. As a result, the CRA is now issuing a notice of redetermination to those who may not have been eligible, forcing them to repay the benefit.

What Should I Do If I Receive a CRA Debt Letter?

Maintaining open and honest communication with the CRA is crucial. If you can afford to pay your tax debt or CERB repayment in full, do so as soon as possible. If you’re struggling to make payments, contact the CRA to discuss a feasible repayment plan. However, ensure that the plan is realistic and doesn’t put you in further financial trouble.

When Should I Consult a Licensed Insolvency Trustee?

If you’re having trouble making payments to the CRA, it could be beneficial to consult a Licensed Insolvency Trustee. These professionals can review your situation and recommend the best path to debt relief. They can also help file all forms of debt relief, which can be a crucial step in dealing with CRA debt letters.

How Can I Clear My Debt to the CRA?

There are several methods to clear your tax debt or CERB repayment:


  • Pay off your debt in full if possible;
  • Submit a fairness application to the CRA to reduce or eliminate interest and penalties;
  • Negotiate a voluntary repayment plan with the CRA;
  • Consider a debt consolidation loan;
  • File a consumer proposal;
  • File for bankruptcy.

Each of these options has its own advantages and disadvantages, so it’s important to carefully consider your situation before deciding.

How Can I Stop the CRA from Sending Debt Letters?

To stop the CRA from sending debt letters, you must address your outstanding debts. This could involve paying your debt in full or filing a consumer proposal or bankruptcy. These legal methods of debt relief can protect you from further contact or action from the CRA.


Receiving debt letters from the CRA can be stressful, but there are many resources available to help. By understanding why you’re receiving these letters and taking steps to address your debt, you can stop the letters and start on the path to financial freedom.

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