Will An Automatic Stay Of Proceedings Stop Canada Revenue Agency?
Stopping Canada Revenue Agency Collections With an Automatic Stay of Proceedings
Consumer proposals and filing for bankruptcy are two of the most common forms of debt relief.
When you take either of these steps, under federal law, it creates an automatic “stay of proceedings.”
What does this mean?
Essentially, the individuals and businesses that you owe money to will no longer be able to continue with legal action to reclaim the debt they are owed.
It is important to note that these are the only relief options where this is true.
But will it also stop the Canada Revenue from collecting or starting to collect tax debts?
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Will Income Tax Debt Collections Cease?
The good news is that income tax debt collections will stop once you file a consumer proposal.
The Canada Revenue Agency will be immediately notified to ensure that they complete a stay of proceedings.
They must abide by the same law as other creditors.
What Are The Exceptions?
Unfortunately, there are exceptions regarding the stay of proceedings.
However, income tax debts is not one of these.
For instance, a consumer proposal will not mean that child arrears cease.
Similarly, it will not stop something like your car being repossessed if you are unable to pay your car payments.
If you are unsure of whether any exceptions apply to you, make sure that you speak to a professional support service.
They can help you navigate this tricky subject.
Is There A Time Limit?
No, there is no time limit on when you can file for a consumer proposal which will create a stay of proceedings, but if you wait too long there could be consequences.
You need to be aware that a stay of proceedings will not help you to get back anything that has been taken, so if you have waited you could lose out.
Filing as soon as you can will give you the best chance to avoid creditors taking your items to pay off the debt you can’t manage.
As such, if you want to avoid more things being taken, take action sooner rather than later.
In cases such as unpaid income taxes, it’s likely that bank accounts will be frozen and wages will be garnished.
If you wait too long and the Canada Revenue Agency registers a lien against your home, even without your consent.
Filing a consumer proposal after this won’t erase it.
Help At Hand
Navigating a consumer proposal, what it means for you, and what will happen once you complete an offer can be tricky.
You might even be wondering whether there are alternative options to a consumer proposal that could be more beneficial to you such as debt consolidation.
We can help you with these questions and one of our expert debt relief advisors is ready to support you.
Get in touch with us now on the phone or fill in an evaluation form and we will get back to you as soon as we can.