The 2017 tax deadline is coming up quickly — April 30, 2018. If you’ll owe a small tax debt, do you know what to do?
Let’s start by defining a small balance — typically, anything under $8,000 is considered a small tax debt. A balance of $8,000 or more means that if you can’t pay and have no way to borrow money, you could leverage a consumer proposal or bankruptcy to get rid of your tax debt. This would stop collections, interest, and reduce the size of your debt.
But if the balance is under $8,000, it’s below the range needed for a consumer proposal or bankruptcy. But just because it’s small doesn’t mean it’s always easy to pay. You’ll have to figure out a way to find the balance, though, because the Canadian Revenue Agency (CRA) will want their money now.
Luckily, there are options available to pay off a small balance.
One of the best ways to pay off a small balance is to look at your assets.
Do you own a vehicle that’s paid off? Do you own a home with equity? Do you have an excellent job with a provable strong income and stability? These are all things you can present to a lender. That lender can then extend you financing to deal with the tax debt.
When it comes to the type of loan or credit you seek out, be extremely wary about using lines of credit or credit cards. These usually aren’t a good idea to pay a tax debt because they often don’t have a fixed repayment schedule and are very high interest. Especially as Canadian interest rates continue to increase , this won’t help you financially.
A short-term loan that you repay over 12 to 36 months is your best bet to stomp out a tax debt. Most loans can be set on a fixed repayment schedule, so you know what you’re paying and when. As long as you keep up with your payments, your tax debt will be erased, and your credit will stay intact. Plus, you won’t have CRA collections coming after you.
Prudent Financial offers short-term loans even to people with bruised credit. Learn more about our services before the 2017 tax deadline.
Call 1-888-852-7647 or visit www.prudentfinancial.net.