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The CRA Sent me a Letter for CERB Repayment - What to do?

The CRA Sent me a Letter for CERB Repayment – What to do?

The Canadian Emergency Response Benefit (CERB) was established by the federal government at the start of the COVID-19 pandemic to help those who couldn’t work due to the effects of the disease. It was created to aid people in coping with their financial instability as a result of the numerous business closures taking place across Canada.

However, after two years, the CRA has begun to send letters to many of those who benefited from it, asking for payback of funds. Some program participants were taken aback by this since they had thought that the money would never need to be repaid.

Why are letters of CERB repayment being sent to Canadians?

The federal government knew it needed to act immediately to help Canadians when they were in a panic because of how challenging COVID was. Because of the fast approval process, Canadians who might not have known they are ineligible for benefits were nonetheless able to submit an online CERB application and receive the funds.

Inflation will make repayment difficult

Inflation will make repayment difficult

Sadly, this comes at a time when Canadians are still struggling to recover from COVID, both physically and financially. Therefore, an additional expense like this simply makes their problems worse. The reality of rising cost of living makes things worse, such that pay cheques cannot keep up with the costs of food, gas, and other monthly expenses.

Making Your CERB Repayment

The agency where you submitted your application should receive CERB payments that need to be returned. The fund can be returned by logging onto your CRA Account, sending the CRA a check, money order, or using your financial institution’s online banking.

When you make a CERB payback, the amount can be subtracted from your earnings when you submit your taxes for the year the benefit was received. This can spare you from the penalty of paying taxes on a benefit that you eventually had to return.

Consequences of not paying back CERB

In the event that you don’t pay your COVID-19 benefit debt, the CRA may take the following measures:

  • Allocating future tax benefits, such as refunds and credits, to your debt.
  • Your bank accounts may become frozen or your pay can be garnished.
  • Put a lien against your property.

Contact the CRA to steer clear of these situations. They will collaborate with you to develop a manageable repayment plan. When you cooperate with the CRA, they might be very understanding. Simply keep the lines of communication open.

People who are unable to make their CERB payments may also be considering debt solutions, like filing for bankruptcy or a consumer proposal. If this is the path you want to take, you can speak with a debt expert at EmpireOne Credit to learn more about your options, that would give you peace of mind.

Debt Solution Options for CERB Repayment

Debt Solution Options for CERB Repayment

The last option should be to file for bankruptcy, however it all depends on your current situation, know there are other debt solution options to consider first, such as:

  • Making a payment arrangement with the CRA.
  • Debt consolidation.
  • Reduce your debt payments each month with a debt management plan, such as a Consumer Proposal.

It can be difficult to deal with CRA debt but can be made easy if you work with a debt expert.  It is not clear whether CERB can be discharged under bankruptcy, as it can only be assessed on a case-by-case basis by the court. While getting out of debt as soon as possible is a desirable thing, know your options, that’s why before making a decision, you should discuss all your options with a debt expert at EmpireOne Credit Solutions.

EmpireOne Credit can help you if you are having trouble paying your CERB debt and if you currently have any other unsecured debt that is keeping you down, learn more about your options. Our team of debt experts can guide you through this difficult period. We offer a free and friendly consultation, giving you the financial freedom you deserve. Debt-Free… Feels Good!

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