Tips on buying a car when you have an outstanding tax debt
Tips on buying a car when you have an outstanding tax debt
Posted on July 6, 2022
If you want to buy a car but owe money to the Canada Revenue Agency, it can seem practically impossible to get a car loan in Copetown.
Because the CRA is a special creditor, most traditional lenders won't give you a loan for a car if you owe money to them.
Why lenders don't like doing business with people who owe money to the CRA
If you owe money to a creditor and don't pay it back, the creditor has to go through a long and complicated process to try to get their money back.
They have to use a collections agency, take you to court, get a judgment against you, and then try to find out if you have any financial assets and use the judgment to seize the assets.
The CRA doesn't have to go through that process at all. Suppose the CRA thinks you owe them money and aren't paying them as agreed.
In that case, they send a simple one-page fax to your bank (they know who you bank with because your bank account is linked to your social insurance number), and your bank accounts are frozen.
The CRA can not only freeze your bank accounts but they can and will also put liens on any property you own, whether there is already a lien on it or not.
If you have a mortgage on a home and owe the CRA money, the CRA gets paid before the original lender.
Because of this, no traditional lender wants to work with someone who owes money to the CRA. The good news is that you can still get a car loan in Copetown, but you need to do a few things.
Set up a plan to pay back the CRA
The government is usually fair, but it is also required by law to collect all debts. This means that your tax debt will not go away.
Don't wait until your bank accounts are frozen to try to come up with a way to pay back your debt. Call the CRA and talk about your payment options.
Usually, they want the debt to be paid back within a year, but most will work with you if you are honest and try to settle your debts in good faith.
Once you have a plan for paying back your debt, you should get it in writing from the CRA, no ifs, ands, or buts.
Bring your credit score up as high as you can
Now that you and the CRA have agreed on a payment plan, you can include those payments in your budget. You should also use this time to work on getting your credit score as high as it can go.
Creditors will feel better if they know that, even though you owe money to the CRA, you can still pay all of your other bills.
How to get a car loan in Copetown if you owe money to the CRA
No matter what other websites say, you can't get a loan on your own, at least not a good loan; you need to go through a local car dealership.
The dealership will be able to explain your situation to potential lenders and negotiate the best interest rate for you at the same time.
If you need a car but owe money to the CRA, you should go to a neighbourhood car dealership today.
Contact Unique Chrysler for help, advice and competitive Copetown car finance and leasing.
Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!