We spoke to a young woman recently that has gone through a very tough time in the past few years. She and her (now) ex spouse could not keep up the payments on their home and lost it under power of sale by the mortgagee. The house was sold at a substantial loss and as the mortgage was guaranteed by Canada Mortgage and Housing Corporation the debt now rests with them. She also has a few credit card debts and other miscellaneous debts.
She and her spouse separated and she is now struggling to live on social assistance while raising a young family.
Creditors would have a hard time trying to collect debts from her as they really have no means of collection under her current circumstances; she doesn’t have wages, so they can’t get a wage garnishment. However, she received notice from CMHC that they will start to redirect any income tax refunds or GST credits against the shortfall from the sale of the house.
CMHC, or any government agency, has the ability to request that Canada Revenue Agency send GST or any income tax rebates to them to offset against any debt owing to the agency.
In this case, her debt is large and her tax refunds and GST credits are small it would take years for this debt to be repaid, especially as interest is accumulating at an alarming rate.
She needed a fresh start after all the stress she has been through in the past few years and would really like to be able to raise her family without this old problem hanging over her head.
After contacting our office, we invited her to have a free consultation with one of our professionals to discuss her options. We reviewed the options of filing bankruptcy or making a consumer proposal. In her case, since her income was low a bankruptcy made the most sense.
Every person’s situation is unique. We meet with people every day who’s debt situation is different and they need a solution that fits their finances. If you are struggling with a debt owed to the government, and have had your GST or other tax refunds seized, contact us for help.
Debt Free in 30 means we can help you eliminate your debt. If you need debt help, book a free consultation with one of our licensed debt experts today.