You Owe CRA $80,000. Here's What NOT to Do.**

Getting a letter from CRA saying you owe money is terrifying. We get it.

Your first instinct is probably to throw everything at it: drain your savings, max out credit, access your HELOC, do whatever it takes to make it go away.

But here's the truth: how you pay off CRA debt matters just as much as paying it off.

What we see all the time:

Someone owes CRA $80,000. They have a HELOC with available credit. They use the entire HELOC to pay CRA immediately.

Problem solved, right?

Not quite.

Now they have:

• An $80,000 HELOC balance at 7.45%

• Monthly interest payments of $496

• No emergency fund left

• Maxed out available credit

And if they lose their job, have a business downturn, or face an emergency? They're in serious trouble.

The better strategy:

Before you access your HELOC, refinance, or drain your savings, call us.

We'll help you figure out:

• Can you set up a payment plan with CRA? (Often yes, and cheaper than HELOC interest)

• Should you refinance your mortgage to consolidate the debt at lower rates?

• Is this the right time to use your HELOC, or should we structure it differently?

• What's your backup plan if income drops?

Real example:

Client owed CRA $95,000. Had a HELOC available but also had a mortgage renewing in 4 months.

Instead of using the HELOC immediately, we:

• Set up a short-term payment plan with CRA

• Waited for renewal

• Refinanced at renewal, consolidated the CRA debt into the mortgage

• Locked in at 5.2% instead of paying 7.45% on the HELOC

• Saved them $179/month

Another real example:

Self-employed client owed $60,000 to CRA. Wanted to use HELOC to pay it immediately.

We looked at their situation and realized they qualified for a B-lender refinance that would:

• Pay off the CRA debt

• Consolidate $35,000 in credit card debt

• Give them breathing room to rebuild their business

Yes, B-lender rates are higher short-term. But two years later, they refinanced back to A-lender rates with stronger income and credit. Total interest saved compared to HELOC + credit cards: $31,000.

What about payment plans with CRA?

People don't realize CRA will often work with you. If you can show them a reasonable payment plan, they'll usually accept it, especially if:

• You're making consistent payments

• You're staying current on your current year's taxes

• You've been honest and proactive in communication

CRA's interest rates aren't great (currently around 10%), but they're better than some alternatives, and they give you flexibility.

The questions we'll ask you:

• How urgent is the CRA debt? (Are they threatening garnishment or liens?)

• What's your mortgage situation? (Renewing soon? Locked in with high penalties?)

• What other debt do you have? (Can we consolidate everything at once?)

• What's your income trajectory? (Getting stronger or still uncertain?)

• What's your backup plan if things get tight?

Bottom line:

Don't panic-pay CRA debt without a strategy. The "right" way to handle it depends entirely on your specific situation.

Sometimes using your HELOC immediately is smart. Sometimes refinancing is better. Sometimes a payment plan gives you the breathing room you need.

We've helped clients navigate $500,000+ in CRA debt. We've seen every scenario. And we know which lenders will still work with you even if you owe CRA money (yes, it's possible).

Call us before you make any moves. We'll walk through your options with zero judgment and help you create a plan that actually works.

Our advice is free, and it could save you tens of thousands.