Can the CRA Garnish Your Wages or Seize Your Property?
Do you have a debt owing to the CRA? Does the CRA feel like a loan shark?
The CRA’s power to collect taxes dwarf those of your other creditors. You have to be aware of the risks and be able to assert your rights.
If you are indebted to the CRA, they can:
- Seize or Freeze your bank accounts
- Garnish your wages
- Garnishing of other income sources (ex. receivables)
- Lien your property or force its sale
- Seize or sell your assets
A certificate/debt is registered by the CRA with the Federal Court, with the same effect as a legal judgment against you. Also, the CRA is not obligated to inform you of these proceedings. A notification may or may not have been delivered to you, and you may be unpleasantly surprised.
Based on a certificate, you are either required to pay the total amount claimed or risk having your property and other assets seized. It is vital that you get help from a professional if you owe the CRA money or they’ve obtained a certificate against you.
If a notice arrives claiming a tax debt, Faris CPA will help you understand if and why you owe the CRA money. We can design a plan to get you back in financial shape and avoid bankruptcy.
If paying the total amount owing is not an option, we can help negotiate a favourable payment plan that enables you to live your life on your own terms, not on the CRA’s. We can also arrange a stay of collections requiring the CRA to stop legal actions against you.
Don’t let the CRA push you around. Contact Faris CPA today at 1 844 340 5771 instead. We will help you understand and exert your rights.
A new client had a difficult CRA audit that disallowed an HST refund valued at almost one million dollars. The CRA audit revealed that his previous accountant had made significant errors which resulted in the disallowing a very significant HST refund.
Sam Faris and his team performed an intensive review of the proposal letter from the CRA along with the income tax act. We were convinced that the case would be won if the records were corrected and a new argument was submitted as a replace to the proposal letter from the CRA.
The CRA auditor denied the response. Our firm filed a Notice of Objection to the CRA.
The Notice of Objection was successful, and our client was able to recover, not only the original refund, but there were additional amounts that the previous accounted had missed that were awarded to our client as well.
When does the CRA garnish wages?
The CRA may garnish wages when an employee owes an unpaid amount. In such cases, CRA will notify the employer to pay the owed amount to the CRA rather than the employee.
Will I be notified if the CRA decides to garnish my wages?
By law, the CRA has to notify you of their intention to garnish your wages. The notification allows you to file a dispute.
How much of my wages can the CRA garnish?
If you’re an employee, the CRA can garnish up to 50% of your wages. However, if you’re a contract worker, they can garnish up to 100%.
How do you stop the garnishment of wages?
There are two ways to stop a CRA wage garnishment. The first option is to file a consumer proposal. It refers to a debt settlement agreement that is legally binding and filed with a Licensed Insolvency Trustee (LIT). Its purpose is to repay your creditors a certain percentage of the full amount owed in exchange for complete debt forgiveness. The second option is to file personal bankruptcy. It is a fully legal process that should help debtors who honestly can’t repay their debts. After the filing, the debts will be discharged in the eyes of the law.
Can you settle a wage garnishment?
To settle a wage garnishment by the CRA, you can try to negotiate a repayment arrangement. You will be required to provide information regarding your monthly living expenses. The objective of which is to ascertain how much you can repay realistically every month. But note that you will be asked to pay back everything you owe to the CRA, plus the interest and penalties.
Can garnishment apply to tax refunds?
In case you file your tax returns and are owed a refund, the only creditor capable of garnishing the tax refund is a government agency like the CRA. This typically happens if you have an existing government debt in collections, like a tax debt, for example. As for private lenders or non-government entities, they are not legally permitted to garnish tax refunds.