Category Archives: Helping Clients Who Have Tax Problems

Is a Direct Referral to a Bankruptcy Trustee a Good Idea?

If you have clients that are dealing with debt, they may have questions about consumer proposals and bankruptcy. Both are important options for those that are struggling to make their monthly payments, but there are important things that need to be considered before you clients choose to take either route.

One of the most important is to let them know that going directly to a bankruptcy trustee is not the smartest choice. Instead, having independent financial representation will allow your client to have their best interests represented, rather than relying on the advice and work of a court appointed official whose responsibility is to both the client and the creditor.

The problem with going directly to the trustee is that they are not obligated to find your client the best deal or to try and save them the most money. Furthermore, trustees will often collect equity in your clients’ assets or surplus income for the benefit of the creditors.

Consumer proposals are also administered by trustees in bankruptcy. When your client goes directly to a trustee for a consumer proposal, the trustee will propose an amount and present it to the creditors to be paid back. If this amount is agreed on, your client has no recourse for negotiation, and must accept whatever deal is made – regardless of whether or not it is the best.

If any of your clients are considering filing for bankruptcy or a consumer proposal, and you want more information to be able to support them, please contact me by emailing kgoldenberg@debtcare.ca, call me at 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

Who Should You Refer to Not-for-Profit Credit Counselling?

Thousands of Canadians suffer from debt, and often don’t know where to turn for help. If your clients find themselves in a tough financial situation, not-for-profit credit counselling may be an option they can consider.

Credit counselling is a service that helps many Canadians deal with financial challenges. Like any other financial solution, it does have its pros and cons. While credit counselling can help Canadians with any amount of debt, it is best suited to those individuals who owe $7,000 or less in total debt. For those clients with more debt, a consumer proposal or other solution may be a better option.

The credit counselling agency will make a proposal to creditors to create a reduced, fixed monthly payment. This proposal is not a consumer proposal and it will not reduce the overall debt. It simply provides for a reduced monthly payment.

The main benefit with credit counselling is that it allows your clients to manage their monthly payments.

There are also some cons, including:

  • Damage to credit – although this has likely already occurred
  • Overall amount of debt isn’t reduced
  • Repayment plan can extend over many years

Generally speaking, it is advisable to encourage your clients to seek financial guidance from an independent financial professional who can help them make the best financial decision and who does not work for the company that is providing the services, rather than going directly to the source.

If you would like to get informed about the differences between credit counselling and other debt solutions and which one is best for you clients, please call 416-907-2582 ext 2587 or email me at kgoldenberg@debtcare.ca.

Helping Clients Who Have Tax Problems

Tax problems impact thousands of Canadians each year. Those who are self-employed, newly divorced, or who struggle to maintain their books are often among the first to be impacted by tax problems.

If you are an accountant, divorce lawyer, or work with self-employed individuals, then you likely encounter people who have tax problems. Once it is determined that an individual has a tax debt that they can’t pay, the real trouble starts. The Canada Revenue Agency wields incredible power and if your client is targeted, there will be little that you can do to help them.

If your client has a tax debt that they can’t pay, it is crucial that he or she comes up with a plan before the Canada Revenue Agency comes after them. This is where we come in.

We understand CRA enforcement practices, policies and procedures and we have the resources to be able to help individuals with the financial aspect of his or her tax problem.

Here is an article released by DebtCare Canada that educates individuals about the implications of missing the income tax deadline that you may want to share with your clients. http://www.debtcare.ca/articles/the-canada-revenue-agency-consequences-of-missing-the-income-tax-deadline/

Education plays a major role in helping people to avoid tax problems and also to face them if they come up.  At DebtCare Canada we take financial education very seriously and often work with organizations that help people who have tax debt. If you have clients facing unmanageable tax debt, please reach out to me. I can be reached at 416-907-2582 ext 2587, by email at kgoldenberg@debtcare.ca and you can find more information about our business to business services at www.debtcareservices.ca