Past Due Income Taxes And Your Credit

Many Canadian taxpayers owe past due tax debt to the Canada Revenue Agency. Some may have found out when applying for credit at their bank, that the bank makes no mention of the tax debt. This is because unless the CRA has filed a writ of execution against you, the past due tax wont report to your credit report.

There are many tactics that the CRA uses to collect money from taxpayers who have a tax debt that will cause the bank to find out that the tax debt exists whether or not it is reporting to the taxpayers credit report.

If the CRA has placed a lien on your home, your bank will find out the next time you try to refinance your property or even sometimes upon mortgage renewal.

If the CRA has placed the garnishment on your wages when you apply for credit at your bank, they will likely ask you for current dated paystub and learn that you have the tax debt with the CRA.

If the CRA has frozen your bank account, they would have had to notify your bank to do so and so your bank is aware that you have the tax debt.

The best thing to do if you have a tax debt is deal with it. Having a tax debt can be worse than having bad credit. Many consumers who have excellent credit are declined for mortgages because of the existence of a tax debt.

If you plan on refinancing your mortgage to pay off the tax debt it is not recommended that you approach the bank who holds your first mortgage. If they are not yet aware of the tax debt, asking them to refinance your mortgage to pay it off may flag you as a risk and cause them call in your mortgage.

The best thing to do is consult a mortgage broker who has many different options for a consumer who has an income tax debt. There are many lenders who will offer home refinancing in the form of lines of credit and second mortgages that you can utilize to pay off your tax debt.

If you negotiate flexible repayment terms and once your tax debt is paid you can feel confident to approach your bank to consolidate your first and second mortgages into one new mortgage.

For more information about tax debt, credit and mortgage planning visit www.trueassess.com.

About the Author:
Assure Assess has a presence both in Canada and the US and has three primary divisions: Communications, Financial Services and Technology Solutions.

Article Originally Published On: http://www.articlesnatch.com

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