CRA has frozen account and cleaned out
CRA has just frozen account and taken the remaining funds. Payment plan was in place and have been making monthly payments to CRA as per the agreement and now they are saying I have to pay the amount in full. I am self employed and just lost a contract 2 months ago and now my income is even less, yet still made my payments to them. I will not qualify for a loan/line of credit. There is not enough equity in my home to cover the remaining $40K owing CRA and they have threatened with further legal action. What alternatives do you recommend? How do I protect my home and vehicle to be able to continue to work?
Posted from: Ontario
Here’s the problem – every 3 to 6 months the CRA collector on your file is supposed to be changed to make certain no special relationships develop. IT keeps everything “above board”. Unfortunately, the new collector doesn’t have to live up to whatever arrangements the old collector made regarding payment plans.
Normally if you owe tax arrears, CRA expects them to be repaid in 24 months or less. If your “deal” was going to take longer than that, well, that’s why the new person isn’t honouring the deal.
In regards to your house and car – the car is protected if it is worth less than $5,650 so CRA doesn’t seize many cars anymore. The house is not protected at all – if CRA registers a tax lien on your house then it becomes a secure debt (like a mortgage) that doesn’t have to be removed until it has either been paid or the house is sold.
You should use the links on this site to contact a trustee in your area to review your situation and options. You need to do this before the lien is registered – once it is in place bankruptcy or a proposal won’t remove it.