Tax Debt Settlement & Debt Forgiveness with Canada Revenue Agency
When you start to run into money trouble, the bills can build up fast.
You might find that you can no longer afford to pay taxes that you owe.
This issue is more common than most people realize and you could be wondering whether there is a way to escape the problem.
Well, the good news is that you can make a deal to gain debt forgiveness from the CRA for owed taxes.
But how much of a reduction can you gain?
There are three programs worth exploring here.
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
Negotiating Your Payment Terms
For instance, you might be able to set up monthly payments to make the cost more affordable.
Payments can stretch over an extended period such as ten months.
You will need to make sure that you explain the circumstances that have left you unable to pay your tax.
You will also need to make sure that you do fill out any outstanding tax returns.
You might also need to show income projections and show why you can’t get a loan to cover the tax debt.
Taxpayer Relief Programs
In certain cases, the CRA may provide relief from both interest charges and penalties.
You can find rules surrounding this on the CRA website.
Typically, you will need to show evidence of extraordinary circumstances, usually because of financial hardship.
It’s possible for instance, that you have been unable to pay due to suffering from an illness or even a natural disaster.
You might also have been faced with severe emotional distress.
These are the types of situations where the CRA will be more likely to forgive you for these costs.
However, this will only provide forgiveness for interest and penalties.
You will still need to pay the bill.
Tax Debt Forgiveness
Typically the CRA will not accept anything less than the full amount that is owed by the individual taxpayer.
They want to make sure that they are able to avoid a difficult precedence.
If you are out of options, then you can consider filing a Consumer Proposal with a Licensed Insolvency Trustee.
As Income tax and similar tax debts are an unsecured debt a Consumer Proposal can help you reduce the amount that you owe significantly.
This is always going to depend on your individual circumstances but a LIT will be able to support you here.
Find Out More
If you are already struggling with insurmountable levels of debt or bills that you can’t afford, then it can seem like an impossible situation.
However, help is always readily available.
Contact us today and we can get you started on the road to debt recovery.
Alternatively, you can fill in a free evaluation form and an expert team member will get back to you without delay.