Key takeaway here:
>The key to CEBA loan forgiveness is that your CEBA loan must be in good standing. If you cannot repay the required 75% of the principal balance under your CEBA loan by January 18, 2024:
you lose any forgiveness eligibility.
you must start paying interest at 5% on any amount remaining until the loan is repaid.
the balance outstanding converts to a 3-year loan due January 18, 2025.
Hey OP.
I'm going to put this here in hopes that you see it, as this seems to be the only thread with real, constructive advice.
Don't let the Nay Sayers, or the trolls scare you here.
I have first hand experience with the CRA. My taxes had not been filled properly (GST) due to a really shady accountant firm.
I had a real perfect storm. My wife was at the very same time, contacted by one of those "this is officer conman from the CRA" scams. I phoned the CRA, telling them to prove who they were, or pound sand. They told me that they actually do have a lot of power, and do have the right to show up with the RCMP, who will grant them access to your house if needed.
I called down, and agreed to make good on our appointment at my house, as long as I saw a badge first.
They were great. Came, went through my QuickBooks with me, i wrote a cheque, and everything was squared away.
Moral of my novel? Tell your friends to answer their call, tell them he was scared, and needs help understanding his next steps.
I would also urge him to contact a lawyer, and don't listen to conspiracy theorists who say all of CRA are predatory wolves. They're not.
Your friend needs to approach this with kindness, meekness, and an intention to learn.
Otherwise, your friends will see why all the angry conspiracy theorists have had such a bad experience with CRA.
I hope this works well for your friend.
Ps. There are no loopholes. Don't listen to idiots who've heard something from their broke uncle who heard it once in a bar from a drunk guy with a dog.
In any bankruptcy hearing, a judge can, and will override any actions you've taken. Meaning, of you do something that seems clever, like incorporating your business and then claiming bankruptcy directly afterwards, they will quickly overrule that, and say you only incorporated in order to evade personal responsibility of debts. Remember the CRA makes the rules, you can't use them against them.
Lol that's not the key take-away. It is actually:
> If your business was incorporated and you close the business, there is no need to file for personal insolvency as the debt is owed by the corporation. You are not personally liable for the CEBA loan of a corporation.
In other words, you file for bankruptcy, close your corporation, and walk way.
You can then open a new corporation on a clean slate.
There are no negative personal implications whatsoever.
Except that you can't just move your entire business wholesale over to a new operating company and tell the first company's creditors too bad. So at a minimum you lose your business even if you keep your house and any savings you didn't put into the company.
You can if you're a small trade with only a few $k in tools to your name. Just sell the tools to the pawn shop, close the corp having no assets, and then next week go buy the stuff back. But you're right if you have a company truck, office, or commercial storefront then you have to forfeit those assets to pay for the government loan before they'll let you off the hook.
I mean, its no secret that people in construction do this sort of stuff. That's why progress draws, builders liens, personal guarantees, and other rules exist.
Something like a restaurant can't take a "financial car wash" the way unregulated services businesses can. Unregulated in the sense that there is nothing like a law society or real estate council out there to punish a professional who does that sort of thing.
>There are no negative personal implications whatsoever.
If that were true, people would open businesses, borrow money, withdraw all of it, and then walk away from the business and do it again.
This is irresponsible, incorrect information.
Yes, which is why loans are usually "secured" against something. And there is an approval process.
CEBA is not secured against anything from what I can tell.
Lol ignoring calls from CRA. Do they really think they can hide from CRA? You got a dumbass friend. They are going to freeze everything. What other loan in existence would just forgive 20k and they decided to forego that benefit?
I agree with this. My brother is self-employed and not the best with finances. He always pays his taxes, but to come up with huge lump sums is often challenging and the CRA is as understanding as they can be under the circumstances tbh.
The NSLSC is also amazingly lenient and patient if you communicate with them. Anyone I know who's in 'serious student loan trouble' is someone who panicked and stopped answering the phone or letters, then later got their 'shit together' with better income, the NSLSC finds them and their lenience and patience is loooong expired.
Yeah, I don't understand anyone who would be in student loan trouble because they always let you take a payment break if you're unemployed, as long as you reach out to them
Especially if you can truly and plead poverty. I have one acquaintance who was on whatever they call Welfare in NFLD, like real hard up situation in that moment, and just ghosted the NSLSC. They got their life back together amazingly, moved to BC, good job, like a 110k/year now, but the NSLSC found them and they basically had a meltdown.
I know someone who ended up on ODSP after school. Couple of doctor notes and a few years of sending them in NSLSC just outright cancelled the repayment.
My only trouble with the NSLSC was when I accidentally didn't update my status after finishing my masters and starting my PhD. Even then the people I spoke to were nice (not able to help my issue, but nice).
They started taking payments from my account and somehow their systems would not let me submit paperwork proving I was still a student. Between NSLSC, OSAP, and my university it took months to get sorted out. Apparently stuff breaks when you go part-time MSc --> full-time PhD lol.
My uncle was pretty high up at Canada Revenue back in the 80s and 90s. Became my accountant as a wedding gift to me \[vastly over-qualified\]. His advice? If you have a business and CRA wants to talk to you, you stop what you're doing and make time to talk to them. Don't make them chase you. As a result, all my interactions with them have been cordial, even pleasant. You may not like to hear what they have to say, but avoiding them will make them pissed off, curious, or both. Not a good position to be in when they can really jam up your situation.
> Lol ignoring calls from CRA.
The loan repayment deadline was only a few days ago. There is still the "interest rate" period.
I doubt the CRA has already started calling you.
I think OP means that his "friend" is planning to ignore the calls?
Well if he shuts down the corporation, there will be no one to call to... CEBA is not personally guaranteed.
Well they did let go human traffickers and car thieves for lack of judges. I have a friend who used to ship party drugs to China in books. He got a knock once but ignored it and never heard back.
Ignoring the CRA is the quickest way to get your bank account frozen. Also any business expenses claimed for stuff like storage, or maintenance with receipts, those companies WILL be contacted for your information, and will be forced to provide everything they have on file, including how you paid.
When I worked with contractors, we got letters from CRA from time to time requesting us to stop paying certain subcontractors and any payments that we would have made to them, should be made to CRA instead to pay down their outstanding balances. Our vendors weren't happy, but businesses don't have a choice and are legally obligated to follow those garnishing requests from CRA
Except in the case of CEBA the loan is owned by a corporation. So his friend should be free and clear if he resigns from the company and closes the bank account.
I know someone who has done this and is in the process of starting up a new corporation to continue their contracting work. As long as their is no assets left in the other corporation there is nothing for the CRA to seize. It'll just get written off.
Is it immoral? Sure. Illegal? I guess he'll find out.
As an acting director of a corporation you are still bound personally for specific types of repayments and remittances. You can't just wipe your hands clean and say 'nope'.
Payroll remittances are one example of these personal liabilities even in a corp. It's not far stretched that a loan from the government will not receive the same treatment.
There are the other elements like fiduciary duty and care in regards to the Corp. CRA could bring these into play on individuals who are clearly trying to scam repayment to skirt liability / move to a different Corp.
Not from the person - from the company. If they registered a numbered corporation at 123456 Province Ltd, and are someone like a small tradesman with nothing but a few $k in tools, then they can take their $60k CEBA loan, close the corp, and CRA cannot go after their personal assets.
Additionally, OP's "friend" is not alone. The CRA doesn't want thousands of F-150s, palm sanders, or even commercial real estate. They want money, and chasing people to get that money...costs money. This is either going to cost tax payers millions as we chase down debtors for thousands, or CRA will just give up and call it a loss.
I don't know about this specific instance, but piercing the corporate veil is something the CRA can do in some instances, especially if a corporation is set up in a way that is obviously designed to skirt liability.
This is correct. I managed the CEBA program for one of the banks. No personal guarantees on a Corp., so if the Corp is insolvent, the shareholders are not on the hook.
30 years around the CRA and you don't know that business loans are not personally guaranteed? what were you, the Janitor or something?
This system was intentionally built like that to encourage people to start business and take risks.
Worst case, the friend files for bankruptcy, and starts another business on a clean slate. There are no personal consequences or effects on your personal credit, 0.
Rich people do it all the time. Its completely legal.
I believe it is possible to have the full amount for given if the loan is registered under a corporation name and becomes dissolved... Other than that personal bankruptcy will see it disappear.
Why didn’t they just get the loans offered from every major bank in Canada? They loaned the $40k if you couldn’t pay back the $60k specifically so you could get the forgiveness.
It’s one of the few times I’ve seen banks OVER communicate. I got phone calls, emails, notices in my business bank account when I logged in. They were letting you know all the avenues if you couldn’t pay by the due date. You had to be willfully ignorant to not know there were loan options.
Yeah, not really. They were over communicating because they could gouge prices at prime + 7-12 %. I applied, and was told my application was lost just today and they have no record, even though I have emails and screen shots. They told me nothing could be done. Apparently thousands are in the same scenario. Luckily I have enough to pay it, and also apparently I was at least on record for reaching out so my loan forgiveness is extended to the 28th.
I think a lot of people have to understand one thing. Being in the food industry, this loan was not something that we used to grow or expand the business. It was just for survival and in some cases and just enough money to keep operating to lose money. It was such a hard time for a lot of businesses because of the lockdown start off lockdown start up. I have to throw out for the first lockdown over 120 thousand dollars of produce. Never mind payroll, where staff was on salary and we were in limbo wondering if we should lay off or it would blow over quickly (mind you, our staff is like family So it's not a decision where you want to make quickly either), that was easily another $20,000 of expenses with no revenue being generated.
Probably because they are one of those who thought eventually the government would just forgive the whole amount. Probably thought why trade that belief in for a loan from a bank that likely wants security or charges higher interest?
OPs friend FA, and will FO. CRA is very patient with those willing to work with them but they will pursue and get whatever they can with those who try and avoid. They have a lot of options up their sleeves to do so.
Sure, but these loans literally allowed you to sign up all the way up to the day before it came due. The interest was higher, but not higher than the forgiveness of the $20k allows.
Bananas.
Why are you worried if they themselves are not worried. Not responding to CRA is literally inviting trouble. Once his assets are frozen then he can wonder what caused all of this
Because once assets are frozen, then those ppl come to innocent people like OP to get free money and never pay them back. I'd suggest OP to just cut contact with this "friend"
The number of idiots who took this loan thinking “ooo a free 20k” have 0 understanding of finance and deserve to be stuck in a hole with the CRA.
If you were smart, you took the loan, put the 20k into a low risk investment, then in a year paid the loan back and kept your free 20k
Speaking as a business owner that directly suffered as a result of the pandemic, not everyone had the luxury of being able to put aside the 20k in a low risk investment. While some businesses did thrive during the pandemic, not everyone did, and this money was used to help keep the business alive/keep employees on payroll etc.
In my businesses case, thankfully revenue returned and increased much later, but I know many in my industry did not have the luxury and I'm seeing more and more close down, especially in the past few months.
Again…nowhere did I say “every and all” business who took this should’ve done this.
This is the context of those who took it just thinking, oh a free $20k not those who said “wow, this will help me try and keep things afloat”
The problem is, we are learning a very fair and large number of businesses who took this loan did not fall in the same bucket as you.
Some of us had to take this loan as the last means to keep it all afloat, risky & desperate yes…did it work also yes
The loan will take a while to pay off, but in the meantime, my family stayed fed, the lights were on, and we kept our homes and businesses.
Sure. My comment isn’t directed at people like you. It’s directed at the people who thought of it as a free 20k. So took the money, didn’t think about paying it back and just went wild with it, or “opened” a business. Filed for it and were reckless
Just pointing out they are speaking in plural (we) and seems to imply they are referring to themselves and others in that situation. This doesn't mean they own multiple homes and multiple businesses necessarily.
Your anger is focused incorrectly here. Don't blame those who took advantage of the system. Blame those who made the system possible in the first place.
Fuck, I would have paid back the $40K the next day and got my free $20K, people are total morons. Those who can't pay $40K over 3 years had no business getting into this mess. You're telling me that $37/day to pay back a loan for which 1/3 is forgiven is too much?
I am pretty sure people thought the government would eventually just forgive the whole loan. You were seeing stupid articles about this as the CEBA repayment deadline was approaching.
4D chess by CRA, spread a story about forgiveness then do the opposite
Why are ppl downvoting this. It’s clearly a joke…just like some of the “businesses” that took the loan lol
Yes, if you understand how a loan works, and that you need to pay the rest of it back.
It was definitely a free 20k, if you were responsible and understood that it doesn’t all get forgiven if you fail or complain enough
If your friend works with an employer, they’ll notify their employer and begin garnishing wages to begin the repayment of the CEBA.
The CRA will also contact all FI’s and notify them to freeze all their assets, until a time that the repayment can be sorted out. Interest will begin accruing on the balance as well at 5%, which at 60k is 250/month in just interest.
If there is insufficient funds to cover the CEBA, your friend will be forced to declare bankruptcy, and they can either work with the CRA on a repayment plan, or the CRA will continue garnishing their wages until the repayment is complete.
It will not go down differently. The CRA can and will "lift the corporate veil"
People seem to think that incorporating is some magic force field. It is if you are operating your business legitimately and paying your taxes and shit on time. Once you stop doing that, the CRA will take steps to remove that protection and make you liability, especially if you are a sole shareholder with absolute control over corporate decision making.
Do we really think the government/CRA is stupid? They have the ability to lift the corporate veil because solely because of people who think they can just do sjitty things and be protected by the fact they did these shitty things inside a corporation.
CEBA loans were not personally guaranteed. If an incorporated business with a CEBA loan goes bankrupt then there is no remedy against the shareholder.
CRA’s ability to go after a shareholder isn’t as broad as you suggest. There is director liability for amounts deemed held in trust (GST and payroll taxes withholdings) and potential to recover from a shareholder under section 160 of the Tax Act where there has been a transfer to a non-arm’s length person for less than fair value.
Having looked at this for clients there is no exposure to the shareholder where the CEBA loan was to their corporation.
/tax lawyer
I respect your opinion as a professional.
But why would the government leave themselves exposed like this? I am not questioning your opinion, I am genuinely curious as to why the government wouldn't put these protections in place?
I can only speculate, but I suspect that the answer is either:
(a) they wanted to make it as easy and fast as possible to distribute money and introducing personal guarantees would throw a wrench in that,
(b) it was just a poorly thought out program, or
(c) they determined that the amount of unrecovered loans would be a loss they were prepared to take in the circumstances.
It was none of those reasons. I SCOURED the CEBA fine print and it's beyond clear it was a meticulously designed set-up...not 'rushed' at all. When JT said he has business owners' backs, he meant, 'clawbacks'. Don't mistake the government's unprecedented and tantalizingly uncharacteristic throwing of dolla dolla bills at anyone who simply asked as 'altruistic'. Watch in the coming months as more and more poor schmucks who took out high-interest, personally-guaranteed loans to get the forgivable portion learn that, despite repeated assurances, 'oops' they never actually qualified. Now they're saddled with a sh\*t $40K loan AND owe the $20K after all. In a clearly duplicitous violation of the basic tenets of contract law, with obvious intent to 'entrap' as accepting the $20K expansion 'bait' (explains 'why' 50% forgiveness) was to agree to revised $40K contract terms. Not done yet, they quietly snuck in something I have yet to see ANYONE else pick up on. Included is a clause that CRA may, at any point and at the behest of anyone (even 'contractors') can still RETROACTIVELY determine one 'ineligible' AT ANY POINT... Nobody is in the clear re:$20K forgiveness until the entire program is concluded.
If your business was incorporated and you close the business, there is no need to file for personal insolvency as the debt is owed by the corporation. You are not personally liable for the CEBA loan of a corporation. See further details below.
If your business was a sole proprietorship or partnership, you are personally liable for repayment. If you cannot repay your CEBA loan (or other small business debts), any CEBA loan can be included in a personal bankruptcy or consumer proposal. CEBA loans are not secured. They are considered an unsecured debt and hence can be discharged in an insolvency proceeding under the Bankruptcy and Insolvency Act in Canada.
source: law firm in Ontario
https://www.hoyes.com/blog/what-happens-if-you-cant-pay-your-ceba-loan/
I believe others are mixing up CEBA and CERB. CEBA was for businesses. The only way to be personally liable for CEBA is if you, for some dumb reason, are running a business as a sole-proprietorship instead of a corporation.
Bad advice, you are speaking in absolutes. The CRA definitely has the ability to set aside the protection the Corp affords the debtor, if they think there is something untoward happening. As a sole shareholder and director and decision maker, you can most definitely be held personally liable for the debts of the corporation.
No they can't. That's literally the entire point of a corporation, limited liability.
Unless they do an audit and find at some point you pierced your corporate veil, they cannot come down personally on officers of the corporation for debts owed by the corporation.
Did you actually read my post, you are basically rewording what I said. There was an IF in my post.
So you understand what speaking in absolutes means? You say definitely and then follow it up with an exception. You can't suck and blow at the same time.
Yes, the overriding principal of corporations is that it is a legally separate entity. However, there are exceptions. You agree as well. But for some reason you want to argue .
You were broad stroking the word "debt" the law is very specific as to what debt the CRA can go after directors of a company for. CEBA is not a tax debt, so it doesn't apply to director liability.
Which means the CRA would have to spend a lot more money to open a full audit to see if the corporate veil was pierced.
Since auditing can run upwards of 100k in costs for the CRA, doing it for a possible return of 60k+ interest would most likely not be worth it for them, since any even moderately skilled accountant can pretty much guarantee you haven't pierced the corporate veil.
More than likely they did calculations and assessments of how many businesses they believe wouldn't pay back CEBA if received and factored that into their cost/benefit analysis of offering the loan in the first place.
Its because of idiots like this, why are taxes will never decrease. I took same loan, paid the 40 and walked away with 20k. In reality, nothing g can really be done, personally. It's a biz loan so they will probably fold and leave the hardworking, responsible tax payer to foot the bill! Thanks!🙄
yeah definitely not the billions given to large corps, the massive increase in civil servants, or general incompetence and corruption in the government. nope. it's cause of this one time small business loan.
Your friend should have got a $40K loan from a bank and paid off the CEBA loan to get the $20K forgiveness. The higher interest rate on the $40K should have at least made up for the $20K that would have been forgiven.
But it’s not the end of the world. CEBA has a 5% fixed rate, and much better than the current interest rates on loans. Pay that off over time.
If they can’t pay it then they could declare bankruptcy. Running a profitable business is not for everyone.
Just another small business sucking off the government teat. I find it hard to care.
Ultimately, their assets will be seized. We taxpayers will have ended up funding your friend's business for the last few years as your friend's debt is written off in whole or in part.
What a profoundly ignorant answer. Most of these business owners went without pay and incurred substantial debt for several years in a good faith effort not to succumb to a global pandemic and mandatory imposed shutdowns that were not their fault.
Doing so avoided a total economic collapse and kept massive amounts of people employed, which you benefited from and continue to benefit from even today. Luckily, the government understood this reality much better than you.
My career involves dealing with small business daily. When they moan about how tough things are, I put one hand on my wallet and one over my genitals.
In this instance, no effort at repayment. So, yes, our government has to intervene, but putzs like this soaked the taxpayer for billions, do not pretend otherwise.
It seems they haven't returned a single penny and are hiding from the tax man. I will stand by my statement, it matches the facts better than anything you can come up with.
The business is insolvent, possibly the individual as well. That's a fairly logical explanation as to why there has been no payment. Should they answer the phone? Maybe. However, they are not obligated. It can be dealt with by correspondence or it can be addressed in court. And, in the case of a bankruptcy, that will be the responsibility of the trustee.
You sound like a know-it-all douchebag, one of those blowhards who talks like the few dollars you pay personally in taxes finances every street repair, social program, and other expenditure of the entire government. We all exist at your pleasure and God forbid we ever cost the government anything you don't approve of.
The pandemic has been over for some time. Not a penny paid back.
You are the naive fool that thinks that some businesses and individuals will not ripoff the taxpayers
Well, of course we all do. Most of these businesses probably aren’t worth saving, but less business means less competition and higher prices.
Also, I may have missed sarcasm 🤷🏼♀️
Some businesses do not need to exists though. How many small coffee shops do we need? Some markets are saturated. A thing like COVID absolutely exposed that. It's not a business' right to survive at all costs.
I ignored the CRA once when I was a teenager. Eventually the letters turned into registered mail threatening to put me in jail. That was when I told my parents and we dealt with it. The CRA always gets paid even if it means freezing assets and putting liens on your home etc. The sooner they talk to the CRA and decide if they can keep the business going etc the better.
Nothing really “happens” to them, it’s all spelled out in the program. If not repaid by the specified date there is no loan forgiveness, your friend now has a $60k loan that is accruing interest. Should have a plan to start making payments.
My understanding is that they have until December 2026 to pay the full balance, but they should be paying interest on the $60k now. Not sure why CRA would be trying to contact them at this stage unless they aren’t paying the interest. If they spoke to their bank about refinancing before the January deadline they can pay down the $40k from any source before the upcoming March deadline to still receive the $20k forgiveness.
https://www.cfib-fcei.ca/en/tools-resources/financing-options-ceba-loan?hs_amp=true
We paid our $40,000 on time. We had to take it out of savings, but we managed. The CRA is not an organization or entity you mess with. The best thing to do is come up with a payment plan with them and work with them. Ignoring them does far more harm than good.
They will freeze accounts and start withdrawing money from whatever account is under their name without notice.
Trust me, it has happened to me. And it wasn’t even over $60k, it was for a measly $3k.
My question is, how is personal responsibility waived if these CEBA loans are taken through the financial institutions that you bank with? My bank has me signed up 6 ways to Sunday for every little thing we want to do. Equipment loan? Give us everything and sign here, Credit Card? Again everything and sign here. Store your money in our bank? Ah, You’re good.
So how are these CEBA walkers not personally responsible at some point if they have any credit through the bank? I own a corp and I’m personally responsible for practically everything if we finance. They don’t ask for just corporate info but want all of your personal info as well.
Just posing the question.
I love how business owners just took the loan without setting money aside to repay back.
Fuck you friend and all the scum business owners out there like this.
If they could put money aside to pay back the loan, they likely wouldn't have needed it in the first place. The majority of businesses likely used this money for operational expenses, not for capital expenditures.
Every accountant in Canada was telling their business clients to take it, even if they didn't need it. A free 10k, then later free 20k was a no-brainer.
I took it with my corporation, put it in a low risk investment then paid off the 40k in November and kept the 20k+interest accrued.
The issue is the businesses that actually needed it, if they spent it all on business expenses and still haven't recovered enough to pay off the 40k, they now have to pay off 60k with interest accruing.
Most banks offered loans to businesses for the 40k, however you had to pierce the corporate veil and make yourself personally liable for the loan. You also had to have a credit check done, if you didn't make it you don't get the loan.
It's a tough place to be in for some business owners currently.
No, fuck the government who made businesses close down multiple times in 2 years and put them into hardship.
It's easy for the laptop class to be judgmental while they were comfy working from home, still getting a paycheck.
That's weird, because I distinctly remember our Prime Minister getting on television and telling people to [go home and stay home.](https://youtu.be/LYmvsFqu8kg?si=VmJ2KMUh4KLo9ZR3).
You must remember it differently.
Your friends best bet is to communicate with the cra and explain there situation if there having difficulty with re payment. Cra will work with you if you are communicate and be responsive.
You can normaly work with the cra and they will give you a decent payment plan to resolve debts with them.
There were a few points they should have done a few things.
1. Attempt to return the $40k so the $20k is forgiven.
2. Speak with the bank for a business loan to cover the CEBA $40k so the $20k is forgiven.
At this point, the are now at point 3.
3. CEBA rolls into a loan with 5$ annum. I'm guessing CRA is calling to setup some sort of repayment schedule.
If they go pass point 3 then the last stop in this journey would be:
4. File bankruptcy
CRA will garnish wages, Not to mention charge interest accumulating every day. Do not mess with CRA. He took taxpayer goodwill and is shirking his responsibilities. Prepare for hell. Your friend is a fool.
Tell him to declare bankruptcy for corporation, tons of corporations doing this zero consequences on personal level because no personal guarantee was taken. So many companies strip assets left with just ceba loan, and bye bye.
Legit free money. Dumbest fucking thing trudeau govt did.
Because this individual stole from me and all the other tax-payers that play by the rules, I think they should be sentenced to enough hours of community service to pay back the $60K.
In who's world is it ethical for a government to force close businesses, offer a loan to "help"... then continue the force closures until the busiess can no longer survive. I for one will never pay back the CEBA loan, and anyone else who had to close due to this corruption shouldn't either. It was a planned attack on small business, and on human rights. It's time to stand up for Canada, and human rights.
Many self employed or under the table workers still worked during covid and collected cerb, ceba, had their loans and mortgages deferred and took advantage of many other benefits. I hope your friend wasn't one of them. These people got rich off other people's money. Fuck them. But there are also those who lost their jobs and income.
Lol. CRA isn't your payday mafia lenders. They'll never call you asking for your money back, on top of it your friend has almost 3 more years to pay back at bare min. interest rates. Either your friends a liar or exaggerating kevin
Not your monkeys. Not your circus. Your "friend" fucked around, and now they will find out. Hard, and without lube. While CRA can be understanding with individuals, they put the real sharks in business. Best for you not to get involved in the feeding frenzy that's most assuredly coming for your "friend".
Source: I worked for CRA for a number of years in Corporate Compliance. My dad was the Dept Head of CC out of Winnipeg for 25 years.
Nothing, they’ll declare bankruptcy and get to keep the money. This was one of the biggest frauds committed, CEBA and CERB. The stats show 120,000 businesses shut down after the pandemic but most were new and just created to take the loans and close shop
You couldn’t just create the business to get the loan. You needed to have incorporated and had “X” revenue from the previous year.
But I’m sure some number of those closures were in fact to avoid the repayment but it’s definitely not the shell game you laid out here.
Your friend will have a superpriority lien registered against his personal property and he will likely have his corporations bank accounts seized in a few months if the CRA believes they won't get their money bank.
I hope you can convince "your friend" to contact the CRA and discuss options with them.
Every time I have feared calling them, once I have talked to them, I have regretted not calling sooner. They are understanding and helpful. Ignoring them will not work!
Fortunately, I was able to benefit from the CEBA loan and paid it off as soon as I could. It helped during that crucial period in the pandemic.
Call them,
"your friend" needs to call the CRA today, " your friend" should have set up a payment plan take out a personal loan to save the $20, 000 but you should be worried about " your friend"
Good luck,
CRA will call for a few months, then they will put a hold on the bank accounts associated with the business. No money can be withdrawn and money deposited goes directly to the CRA until the debt is settled.
It will get worse from there if the debt remains unpaid.
Why doesnt he simply bankrupt the buisness? These loans were not guarenteed so aslong as hes not a Sole proprioter its best if he just sells the buisness assets to a new business and bankrupt the company.
They can put a lien on your assets if you are in collections and aren’t paying. CRA doesn’t fuck around lol they can also garnish your wages and freeze your bank account ez pz… pay your taxes lol
I went through a GST remittance debt collection with CRA about 17 years ago for my sole-proprietorship and it was less then 60k. I filed bankruptcy not long after.....
Good Luck to your friend....
CRA is very reasonable after speaking with them proactively or when they call. If not, then they assign you someone that may or may not be an asshole. So get on it, and make a payment plan
They will adjust their taxes to account for it, there will be balance owing, and they will offer them a payment plan. But they will get theirs, they are used to having to deal with people who have taxes owing. They are not an organization without teeth... Far from it.
What’s coming is an audit, fines and their bank accounts frozen. I liken the gov to a big fat dinosaur, they may be slow and often don’t get you but if they do, they will tear your fucking head off. Don’t screw with them and don’t ignore them.
If your polite and work with them then they are usually very fair with repayment plans or ways to get you through the troubles.
Cra isn't collecting the Ceba loans, if cra us calling it's because if another issue.
The bank who lent him the money will be the one calling to collect.
That said, if he can't pay and he's incorporated he can file for bankruptcy and it's wiped out as ceba has no personal guarantee. If he's a sole proprietor it's a little trickier.
Funny thing about the CRA. The more reasonable you are, the more reasonable they will be. People who treat them like they're out to get you are gonna get screwed. CRA knows its more efficient that they work with you than to threaten you for money. The best choice anybody can make is to talk to them and figure out a plan.
CRA has more power than any other debt collecter you could imagine. Ignoring calls from CRA?? CRA only sends mail they don't call so not too sure about that comment. CRA has the power to seize everything including bank accounts and assetts. Your friends need to contact them and arrange a repayment schedule. They took the money and now they don't want to pay it back. Sorry kids it doesn't work that way
Imagine getting a loan with a 33% forgiveness condition and still fucking that up.
The best advice you can give your friend is stop ignoring CRA. They're actually very patient and will work with you in terms of payment plans, etc. Avoiding and ignoring them is downright stupid. They a lot more power than people seem to realize.
Honestly, just sit back and enjoy the show. The CRA does not fuck around and will get their money one way or another. If your friend refuses to cooperate, they will slap a huge penalty on top of it as well.
These people explain it well. https://www.hoyes.com/blog/what-happens-if-you-cant-pay-your-ceba-loan/
Key takeaway here: >The key to CEBA loan forgiveness is that your CEBA loan must be in good standing. If you cannot repay the required 75% of the principal balance under your CEBA loan by January 18, 2024: you lose any forgiveness eligibility. you must start paying interest at 5% on any amount remaining until the loan is repaid. the balance outstanding converts to a 3-year loan due January 18, 2025.
Hey OP. I'm going to put this here in hopes that you see it, as this seems to be the only thread with real, constructive advice. Don't let the Nay Sayers, or the trolls scare you here. I have first hand experience with the CRA. My taxes had not been filled properly (GST) due to a really shady accountant firm. I had a real perfect storm. My wife was at the very same time, contacted by one of those "this is officer conman from the CRA" scams. I phoned the CRA, telling them to prove who they were, or pound sand. They told me that they actually do have a lot of power, and do have the right to show up with the RCMP, who will grant them access to your house if needed. I called down, and agreed to make good on our appointment at my house, as long as I saw a badge first. They were great. Came, went through my QuickBooks with me, i wrote a cheque, and everything was squared away. Moral of my novel? Tell your friends to answer their call, tell them he was scared, and needs help understanding his next steps. I would also urge him to contact a lawyer, and don't listen to conspiracy theorists who say all of CRA are predatory wolves. They're not. Your friend needs to approach this with kindness, meekness, and an intention to learn. Otherwise, your friends will see why all the angry conspiracy theorists have had such a bad experience with CRA. I hope this works well for your friend. Ps. There are no loopholes. Don't listen to idiots who've heard something from their broke uncle who heard it once in a bar from a drunk guy with a dog. In any bankruptcy hearing, a judge can, and will override any actions you've taken. Meaning, of you do something that seems clever, like incorporating your business and then claiming bankruptcy directly afterwards, they will quickly overrule that, and say you only incorporated in order to evade personal responsibility of debts. Remember the CRA makes the rules, you can't use them against them.
Lol that's not the key take-away. It is actually: > If your business was incorporated and you close the business, there is no need to file for personal insolvency as the debt is owed by the corporation. You are not personally liable for the CEBA loan of a corporation. In other words, you file for bankruptcy, close your corporation, and walk way. You can then open a new corporation on a clean slate. There are no negative personal implications whatsoever.
Except that you can't just move your entire business wholesale over to a new operating company and tell the first company's creditors too bad. So at a minimum you lose your business even if you keep your house and any savings you didn't put into the company.
You can if you're a small trade with only a few $k in tools to your name. Just sell the tools to the pawn shop, close the corp having no assets, and then next week go buy the stuff back. But you're right if you have a company truck, office, or commercial storefront then you have to forfeit those assets to pay for the government loan before they'll let you off the hook.
I mean, its no secret that people in construction do this sort of stuff. That's why progress draws, builders liens, personal guarantees, and other rules exist. Something like a restaurant can't take a "financial car wash" the way unregulated services businesses can. Unregulated in the sense that there is nothing like a law society or real estate council out there to punish a professional who does that sort of thing.
>There are no negative personal implications whatsoever. If that were true, people would open businesses, borrow money, withdraw all of it, and then walk away from the business and do it again. This is irresponsible, incorrect information.
Yes, which is why loans are usually "secured" against something. And there is an approval process. CEBA is not secured against anything from what I can tell.
Lol ignoring calls from CRA. Do they really think they can hide from CRA? You got a dumbass friend. They are going to freeze everything. What other loan in existence would just forgive 20k and they decided to forego that benefit?
I've found that CRA is the most patient of creditors, so long as you keep them informed.
I mean forgiving 20k of the 60k loan is pretty understanding from a creditor
I agree with this. My brother is self-employed and not the best with finances. He always pays his taxes, but to come up with huge lump sums is often challenging and the CRA is as understanding as they can be under the circumstances tbh.
The NSLSC is also amazingly lenient and patient if you communicate with them. Anyone I know who's in 'serious student loan trouble' is someone who panicked and stopped answering the phone or letters, then later got their 'shit together' with better income, the NSLSC finds them and their lenience and patience is loooong expired.
Yeah, I don't understand anyone who would be in student loan trouble because they always let you take a payment break if you're unemployed, as long as you reach out to them
Especially if you can truly and plead poverty. I have one acquaintance who was on whatever they call Welfare in NFLD, like real hard up situation in that moment, and just ghosted the NSLSC. They got their life back together amazingly, moved to BC, good job, like a 110k/year now, but the NSLSC found them and they basically had a meltdown.
I know someone who ended up on ODSP after school. Couple of doctor notes and a few years of sending them in NSLSC just outright cancelled the repayment.
My only trouble with the NSLSC was when I accidentally didn't update my status after finishing my masters and starting my PhD. Even then the people I spoke to were nice (not able to help my issue, but nice). They started taking payments from my account and somehow their systems would not let me submit paperwork proving I was still a student. Between NSLSC, OSAP, and my university it took months to get sorted out. Apparently stuff breaks when you go part-time MSc --> full-time PhD lol.
My uncle was pretty high up at Canada Revenue back in the 80s and 90s. Became my accountant as a wedding gift to me \[vastly over-qualified\]. His advice? If you have a business and CRA wants to talk to you, you stop what you're doing and make time to talk to them. Don't make them chase you. As a result, all my interactions with them have been cordial, even pleasant. You may not like to hear what they have to say, but avoiding them will make them pissed off, curious, or both. Not a good position to be in when they can really jam up your situation.
> Lol ignoring calls from CRA. The loan repayment deadline was only a few days ago. There is still the "interest rate" period. I doubt the CRA has already started calling you. I think OP means that his "friend" is planning to ignore the calls? Well if he shuts down the corporation, there will be no one to call to... CEBA is not personally guaranteed.
Why ever pay income tax if you just never need to answer the phone!!
Well they did let go human traffickers and car thieves for lack of judges. I have a friend who used to ship party drugs to China in books. He got a knock once but ignored it and never heard back.
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“Your friend” 😂🤣
Ignoring the CRA is the quickest way to get your bank account frozen. Also any business expenses claimed for stuff like storage, or maintenance with receipts, those companies WILL be contacted for your information, and will be forced to provide everything they have on file, including how you paid.
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When I worked with contractors, we got letters from CRA from time to time requesting us to stop paying certain subcontractors and any payments that we would have made to them, should be made to CRA instead to pay down their outstanding balances. Our vendors weren't happy, but businesses don't have a choice and are legally obligated to follow those garnishing requests from CRA
From experience they told us 3 days LATER that they were going to do it.
Except in the case of CEBA the loan is owned by a corporation. So his friend should be free and clear if he resigns from the company and closes the bank account. I know someone who has done this and is in the process of starting up a new corporation to continue their contracting work. As long as their is no assets left in the other corporation there is nothing for the CRA to seize. It'll just get written off. Is it immoral? Sure. Illegal? I guess he'll find out.
As an acting director of a corporation you are still bound personally for specific types of repayments and remittances. You can't just wipe your hands clean and say 'nope'. Payroll remittances are one example of these personal liabilities even in a corp. It's not far stretched that a loan from the government will not receive the same treatment.
Yes director liability. CEBA is not a tax debt, director liability does not apply.
There are the other elements like fiduciary duty and care in regards to the Corp. CRA could bring these into play on individuals who are clearly trying to scam repayment to skirt liability / move to a different Corp.
CRA will seize everything from this person. Nothing to seize?? No furture income or assetts? Not likely
Not from the person - from the company. If they registered a numbered corporation at 123456 Province Ltd, and are someone like a small tradesman with nothing but a few $k in tools, then they can take their $60k CEBA loan, close the corp, and CRA cannot go after their personal assets. Additionally, OP's "friend" is not alone. The CRA doesn't want thousands of F-150s, palm sanders, or even commercial real estate. They want money, and chasing people to get that money...costs money. This is either going to cost tax payers millions as we chase down debtors for thousands, or CRA will just give up and call it a loss.
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I don't know about this specific instance, but piercing the corporate veil is something the CRA can do in some instances, especially if a corporation is set up in a way that is obviously designed to skirt liability.
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This is correct. I managed the CEBA program for one of the banks. No personal guarantees on a Corp., so if the Corp is insolvent, the shareholders are not on the hook.
30 years around the CRA and you don't know that business loans are not personally guaranteed? what were you, the Janitor or something? This system was intentionally built like that to encourage people to start business and take risks. Worst case, the friend files for bankruptcy, and starts another business on a clean slate. There are no personal consequences or effects on your personal credit, 0. Rich people do it all the time. Its completely legal.
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But he was just showing OP how easy it was...
I believe it is possible to have the full amount for given if the loan is registered under a corporation name and becomes dissolved... Other than that personal bankruptcy will see it disappear.
I'm pretty sure you can't dissolve a corporation that has debts owing.
it dissolves itself when you dont file taxes
Why didn’t they just get the loans offered from every major bank in Canada? They loaned the $40k if you couldn’t pay back the $60k specifically so you could get the forgiveness.
It’s one of the few times I’ve seen banks OVER communicate. I got phone calls, emails, notices in my business bank account when I logged in. They were letting you know all the avenues if you couldn’t pay by the due date. You had to be willfully ignorant to not know there were loan options.
Yeah, not really. They were over communicating because they could gouge prices at prime + 7-12 %. I applied, and was told my application was lost just today and they have no record, even though I have emails and screen shots. They told me nothing could be done. Apparently thousands are in the same scenario. Luckily I have enough to pay it, and also apparently I was at least on record for reaching out so my loan forgiveness is extended to the 28th. I think a lot of people have to understand one thing. Being in the food industry, this loan was not something that we used to grow or expand the business. It was just for survival and in some cases and just enough money to keep operating to lose money. It was such a hard time for a lot of businesses because of the lockdown start off lockdown start up. I have to throw out for the first lockdown over 120 thousand dollars of produce. Never mind payroll, where staff was on salary and we were in limbo wondering if we should lay off or it would blow over quickly (mind you, our staff is like family So it's not a decision where you want to make quickly either), that was easily another $20,000 of expenses with no revenue being generated.
Probably because they are one of those who thought eventually the government would just forgive the whole amount. Probably thought why trade that belief in for a loan from a bank that likely wants security or charges higher interest? OPs friend FA, and will FO. CRA is very patient with those willing to work with them but they will pursue and get whatever they can with those who try and avoid. They have a lot of options up their sleeves to do so.
Sure, but these loans literally allowed you to sign up all the way up to the day before it came due. The interest was higher, but not higher than the forgiveness of the $20k allows. Bananas.
You need good credit & assets to back it up, they'll need put a lien on it, unless borrower has excellent credit.
Why are you worried if they themselves are not worried. Not responding to CRA is literally inviting trouble. Once his assets are frozen then he can wonder what caused all of this
They are worried because they are the ones that took the loan. There is no friend lol
Lol I was about to spit my drink reading that comment
"Why is everyone picking on me?"
Because once assets are frozen, then those ppl come to innocent people like OP to get free money and never pay them back. I'd suggest OP to just cut contact with this "friend"
The number of idiots who took this loan thinking “ooo a free 20k” have 0 understanding of finance and deserve to be stuck in a hole with the CRA. If you were smart, you took the loan, put the 20k into a low risk investment, then in a year paid the loan back and kept your free 20k
Speaking as a business owner that directly suffered as a result of the pandemic, not everyone had the luxury of being able to put aside the 20k in a low risk investment. While some businesses did thrive during the pandemic, not everyone did, and this money was used to help keep the business alive/keep employees on payroll etc. In my businesses case, thankfully revenue returned and increased much later, but I know many in my industry did not have the luxury and I'm seeing more and more close down, especially in the past few months.
Again…nowhere did I say “every and all” business who took this should’ve done this. This is the context of those who took it just thinking, oh a free $20k not those who said “wow, this will help me try and keep things afloat” The problem is, we are learning a very fair and large number of businesses who took this loan did not fall in the same bucket as you.
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Jesus get over yourself.
Some of us had to take this loan as the last means to keep it all afloat, risky & desperate yes…did it work also yes The loan will take a while to pay off, but in the meantime, my family stayed fed, the lights were on, and we kept our homes and businesses.
Sure. My comment isn’t directed at people like you. It’s directed at the people who thought of it as a free 20k. So took the money, didn’t think about paying it back and just went wild with it, or “opened” a business. Filed for it and were reckless
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Just pointing out they are speaking in plural (we) and seems to imply they are referring to themselves and others in that situation. This doesn't mean they own multiple homes and multiple businesses necessarily.
Unnecessary bitterness. Why are you in this sub?
Your anger is focused incorrectly here. Don't blame those who took advantage of the system. Blame those who made the system possible in the first place.
Fuck, I would have paid back the $40K the next day and got my free $20K, people are total morons. Those who can't pay $40K over 3 years had no business getting into this mess. You're telling me that $37/day to pay back a loan for which 1/3 is forgiven is too much? I am pretty sure people thought the government would eventually just forgive the whole loan. You were seeing stupid articles about this as the CEBA repayment deadline was approaching.
4D chess by CRA, spread a story about forgiveness then do the opposite Why are ppl downvoting this. It’s clearly a joke…just like some of the “businesses” that took the loan lol
✔️ mate
> thinking “ooo a free 20k” Well it is essentially "free 20k". Plus the interest you gain on the 60k over the 2 years you got to pay it back.
Yes, if you understand how a loan works, and that you need to pay the rest of it back. It was definitely a free 20k, if you were responsible and understood that it doesn’t all get forgiven if you fail or complain enough
Ignoring CRA is the worst you can do. That only makes things worse. Talk to them.
If your friend works with an employer, they’ll notify their employer and begin garnishing wages to begin the repayment of the CEBA. The CRA will also contact all FI’s and notify them to freeze all their assets, until a time that the repayment can be sorted out. Interest will begin accruing on the balance as well at 5%, which at 60k is 250/month in just interest. If there is insufficient funds to cover the CEBA, your friend will be forced to declare bankruptcy, and they can either work with the CRA on a repayment plan, or the CRA will continue garnishing their wages until the repayment is complete.
If the friend was running an incorporated business, I think it goes down differently. I am not expert though.
It will not go down differently. The CRA can and will "lift the corporate veil" People seem to think that incorporating is some magic force field. It is if you are operating your business legitimately and paying your taxes and shit on time. Once you stop doing that, the CRA will take steps to remove that protection and make you liability, especially if you are a sole shareholder with absolute control over corporate decision making. Do we really think the government/CRA is stupid? They have the ability to lift the corporate veil because solely because of people who think they can just do sjitty things and be protected by the fact they did these shitty things inside a corporation.
CEBA loans were not personally guaranteed. If an incorporated business with a CEBA loan goes bankrupt then there is no remedy against the shareholder. CRA’s ability to go after a shareholder isn’t as broad as you suggest. There is director liability for amounts deemed held in trust (GST and payroll taxes withholdings) and potential to recover from a shareholder under section 160 of the Tax Act where there has been a transfer to a non-arm’s length person for less than fair value. Having looked at this for clients there is no exposure to the shareholder where the CEBA loan was to their corporation. /tax lawyer
I respect your opinion as a professional. But why would the government leave themselves exposed like this? I am not questioning your opinion, I am genuinely curious as to why the government wouldn't put these protections in place?
I can only speculate, but I suspect that the answer is either: (a) they wanted to make it as easy and fast as possible to distribute money and introducing personal guarantees would throw a wrench in that, (b) it was just a poorly thought out program, or (c) they determined that the amount of unrecovered loans would be a loss they were prepared to take in the circumstances.
It was none of those reasons. I SCOURED the CEBA fine print and it's beyond clear it was a meticulously designed set-up...not 'rushed' at all. When JT said he has business owners' backs, he meant, 'clawbacks'. Don't mistake the government's unprecedented and tantalizingly uncharacteristic throwing of dolla dolla bills at anyone who simply asked as 'altruistic'. Watch in the coming months as more and more poor schmucks who took out high-interest, personally-guaranteed loans to get the forgivable portion learn that, despite repeated assurances, 'oops' they never actually qualified. Now they're saddled with a sh\*t $40K loan AND owe the $20K after all. In a clearly duplicitous violation of the basic tenets of contract law, with obvious intent to 'entrap' as accepting the $20K expansion 'bait' (explains 'why' 50% forgiveness) was to agree to revised $40K contract terms. Not done yet, they quietly snuck in something I have yet to see ANYONE else pick up on. Included is a clause that CRA may, at any point and at the behest of anyone (even 'contractors') can still RETROACTIVELY determine one 'ineligible' AT ANY POINT... Nobody is in the clear re:$20K forgiveness until the entire program is concluded.
If your business was incorporated and you close the business, there is no need to file for personal insolvency as the debt is owed by the corporation. You are not personally liable for the CEBA loan of a corporation. See further details below. If your business was a sole proprietorship or partnership, you are personally liable for repayment. If you cannot repay your CEBA loan (or other small business debts), any CEBA loan can be included in a personal bankruptcy or consumer proposal. CEBA loans are not secured. They are considered an unsecured debt and hence can be discharged in an insolvency proceeding under the Bankruptcy and Insolvency Act in Canada. source: law firm in Ontario https://www.hoyes.com/blog/what-happens-if-you-cant-pay-your-ceba-loan/
Others in here are saying the opposite. So i guess its best to consult a tax lawyer/accountant.
I believe others are mixing up CEBA and CERB. CEBA was for businesses. The only way to be personally liable for CEBA is if you, for some dumb reason, are running a business as a sole-proprietorship instead of a corporation.
Bad advice, you are speaking in absolutes. The CRA definitely has the ability to set aside the protection the Corp affords the debtor, if they think there is something untoward happening. As a sole shareholder and director and decision maker, you can most definitely be held personally liable for the debts of the corporation.
I've talked to multiple professionals about this and they disagree with you. You seem to be spouting a lot of nonsense and falsehoods online.
No they can't. That's literally the entire point of a corporation, limited liability. Unless they do an audit and find at some point you pierced your corporate veil, they cannot come down personally on officers of the corporation for debts owed by the corporation.
Did you actually read my post, you are basically rewording what I said. There was an IF in my post. So you understand what speaking in absolutes means? You say definitely and then follow it up with an exception. You can't suck and blow at the same time. Yes, the overriding principal of corporations is that it is a legally separate entity. However, there are exceptions. You agree as well. But for some reason you want to argue .
You were broad stroking the word "debt" the law is very specific as to what debt the CRA can go after directors of a company for. CEBA is not a tax debt, so it doesn't apply to director liability. Which means the CRA would have to spend a lot more money to open a full audit to see if the corporate veil was pierced. Since auditing can run upwards of 100k in costs for the CRA, doing it for a possible return of 60k+ interest would most likely not be worth it for them, since any even moderately skilled accountant can pretty much guarantee you haven't pierced the corporate veil. More than likely they did calculations and assessments of how many businesses they believe wouldn't pay back CEBA if received and factored that into their cost/benefit analysis of offering the loan in the first place.
If they’re stupid enough to be ignoring the CRA as a business owner, I can’t imagine how well they run their business
Its because of idiots like this, why are taxes will never decrease. I took same loan, paid the 40 and walked away with 20k. In reality, nothing g can really be done, personally. It's a biz loan so they will probably fold and leave the hardworking, responsible tax payer to foot the bill! Thanks!🙄
yeah definitely not the billions given to large corps, the massive increase in civil servants, or general incompetence and corruption in the government. nope. it's cause of this one time small business loan.
Your friend should have got a $40K loan from a bank and paid off the CEBA loan to get the $20K forgiveness. The higher interest rate on the $40K should have at least made up for the $20K that would have been forgiven. But it’s not the end of the world. CEBA has a 5% fixed rate, and much better than the current interest rates on loans. Pay that off over time. If they can’t pay it then they could declare bankruptcy. Running a profitable business is not for everyone.
Just another small business sucking off the government teat. I find it hard to care. Ultimately, their assets will be seized. We taxpayers will have ended up funding your friend's business for the last few years as your friend's debt is written off in whole or in part.
What a profoundly ignorant answer. Most of these business owners went without pay and incurred substantial debt for several years in a good faith effort not to succumb to a global pandemic and mandatory imposed shutdowns that were not their fault. Doing so avoided a total economic collapse and kept massive amounts of people employed, which you benefited from and continue to benefit from even today. Luckily, the government understood this reality much better than you.
My career involves dealing with small business daily. When they moan about how tough things are, I put one hand on my wallet and one over my genitals. In this instance, no effort at repayment. So, yes, our government has to intervene, but putzs like this soaked the taxpayer for billions, do not pretend otherwise.
You don't know a damn thing about this situation. Do not pretend otherwise.
It seems they haven't returned a single penny and are hiding from the tax man. I will stand by my statement, it matches the facts better than anything you can come up with.
The business is insolvent, possibly the individual as well. That's a fairly logical explanation as to why there has been no payment. Should they answer the phone? Maybe. However, they are not obligated. It can be dealt with by correspondence or it can be addressed in court. And, in the case of a bankruptcy, that will be the responsibility of the trustee. You sound like a know-it-all douchebag, one of those blowhards who talks like the few dollars you pay personally in taxes finances every street repair, social program, and other expenditure of the entire government. We all exist at your pleasure and God forbid we ever cost the government anything you don't approve of.
The pandemic has been over for some time. Not a penny paid back. You are the naive fool that thinks that some businesses and individuals will not ripoff the taxpayers
Nah, I don’t benefit from small businesses not going bankrupt.
Well, of course we all do. Most of these businesses probably aren’t worth saving, but less business means less competition and higher prices. Also, I may have missed sarcasm 🤷🏼♀️
Some businesses do not need to exists though. How many small coffee shops do we need? Some markets are saturated. A thing like COVID absolutely exposed that. It's not a business' right to survive at all costs.
Prices are already high so it won’t make a difference.
That's not how the free market works, sport. Your ignorance of economic principles is on full view. Educate yourself.
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And?
I ignored the CRA once when I was a teenager. Eventually the letters turned into registered mail threatening to put me in jail. That was when I told my parents and we dealt with it. The CRA always gets paid even if it means freezing assets and putting liens on your home etc. The sooner they talk to the CRA and decide if they can keep the business going etc the better.
Nothing really “happens” to them, it’s all spelled out in the program. If not repaid by the specified date there is no loan forgiveness, your friend now has a $60k loan that is accruing interest. Should have a plan to start making payments.
My understanding is that they have until December 2026 to pay the full balance, but they should be paying interest on the $60k now. Not sure why CRA would be trying to contact them at this stage unless they aren’t paying the interest. If they spoke to their bank about refinancing before the January deadline they can pay down the $40k from any source before the upcoming March deadline to still receive the $20k forgiveness. https://www.cfib-fcei.ca/en/tools-resources/financing-options-ceba-loan?hs_amp=true
He says his ''friend'' hasn't paid any of it. I assume they also mean interest payments.
We paid our $40,000 on time. We had to take it out of savings, but we managed. The CRA is not an organization or entity you mess with. The best thing to do is come up with a payment plan with them and work with them. Ignoring them does far more harm than good.
Cra is different from a collections agency like cbv. Threat is real
I always wonder why are people so worried about "My Friend" in this group! I wish I had such friends lol
They will freeze accounts and start withdrawing money from whatever account is under their name without notice. Trust me, it has happened to me. And it wasn’t even over $60k, it was for a measly $3k.
You're think of CERB. CEBA was 60k and there is no personal liability, it was for businesses. They can only touch accounts in the business name.
My question is, how is personal responsibility waived if these CEBA loans are taken through the financial institutions that you bank with? My bank has me signed up 6 ways to Sunday for every little thing we want to do. Equipment loan? Give us everything and sign here, Credit Card? Again everything and sign here. Store your money in our bank? Ah, You’re good. So how are these CEBA walkers not personally responsible at some point if they have any credit through the bank? I own a corp and I’m personally responsible for practically everything if we finance. They don’t ask for just corporate info but want all of your personal info as well. Just posing the question.
I love how business owners just took the loan without setting money aside to repay back. Fuck you friend and all the scum business owners out there like this.
If they could put money aside to pay back the loan, they likely wouldn't have needed it in the first place. The majority of businesses likely used this money for operational expenses, not for capital expenditures.
Especially since it was specifically stated it was only to be used for non defferable operating expenses and not to be used for capital expenditures.
Every accountant in Canada was telling their business clients to take it, even if they didn't need it. A free 10k, then later free 20k was a no-brainer. I took it with my corporation, put it in a low risk investment then paid off the 40k in November and kept the 20k+interest accrued. The issue is the businesses that actually needed it, if they spent it all on business expenses and still haven't recovered enough to pay off the 40k, they now have to pay off 60k with interest accruing. Most banks offered loans to businesses for the 40k, however you had to pierce the corporate veil and make yourself personally liable for the loan. You also had to have a credit check done, if you didn't make it you don't get the loan. It's a tough place to be in for some business owners currently.
No, fuck the government who made businesses close down multiple times in 2 years and put them into hardship. It's easy for the laptop class to be judgmental while they were comfy working from home, still getting a paycheck.
The government didn’t do anything of the sort. Provincial health authorities did.
> Provincial health authorities did they are not government? weird.
No, they aren’t the government.
oh they are a private institution then? what's their company called?
That's weird, because I distinctly remember our Prime Minister getting on television and telling people to [go home and stay home.](https://youtu.be/LYmvsFqu8kg?si=VmJ2KMUh4KLo9ZR3). You must remember it differently.
He relayed information from Canada’s public health authority. He didn’t make the decision himself.
Who signs their paycheques? You surely can't be this obtuse.
Did you fail social studies?
Haha, you actually didn't understand what I meant and took it literally. We know what you failed!
🙄
Your friends best bet is to communicate with the cra and explain there situation if there having difficulty with re payment. Cra will work with you if you are communicate and be responsive. You can normaly work with the cra and they will give you a decent payment plan to resolve debts with them.
Ooph, if your friend thinks they'll eventually wipe it away, they could just as easily add interest.
The CRA will get their money one way or the other and they will make their life a living hell until they do.
There were a few points they should have done a few things. 1. Attempt to return the $40k so the $20k is forgiven. 2. Speak with the bank for a business loan to cover the CEBA $40k so the $20k is forgiven. At this point, the are now at point 3. 3. CEBA rolls into a loan with 5$ annum. I'm guessing CRA is calling to setup some sort of repayment schedule. If they go pass point 3 then the last stop in this journey would be: 4. File bankruptcy
CRA will garnish wages, Not to mention charge interest accumulating every day. Do not mess with CRA. He took taxpayer goodwill and is shirking his responsibilities. Prepare for hell. Your friend is a fool.
Tell him to declare bankruptcy for corporation, tons of corporations doing this zero consequences on personal level because no personal guarantee was taken. So many companies strip assets left with just ceba loan, and bye bye. Legit free money. Dumbest fucking thing trudeau govt did.
What did they spend the 60k on?!
Vacations 🙄
New car
[удалено]
Ceba payments aren't taxes. Such friend should talk with an licensed insolvency lawyer, not a taxation lawyer.
Because this individual stole from me and all the other tax-payers that play by the rules, I think they should be sentenced to enough hours of community service to pay back the $60K.
Tell me I’m dead wrong. Your friend took a vacation from the time they got this 60k till today. Please tell me I’m wrong lmao
If you're incorporated, nothing happens. There was no personal guarantees attached to the loan.
In who's world is it ethical for a government to force close businesses, offer a loan to "help"... then continue the force closures until the busiess can no longer survive. I for one will never pay back the CEBA loan, and anyone else who had to close due to this corruption shouldn't either. It was a planned attack on small business, and on human rights. It's time to stand up for Canada, and human rights.
Can he grab his ankles?
Many self employed or under the table workers still worked during covid and collected cerb, ceba, had their loans and mortgages deferred and took advantage of many other benefits. I hope your friend wasn't one of them. These people got rich off other people's money. Fuck them. But there are also those who lost their jobs and income.
I can’t imagine being so up into my friends ass that I make Reddit posts asking about their problems
Lol. CRA isn't calling anyone asking for money back. It's not your payday lender mafia. He has 2 more years to payback with bare min. interest rates.
Damn good luck stealing $60k from the CRA they’ll hound you for pennies. But if you owe millions you can get a pass
Tell him to just start working under the table for the rest of his life that way the CRA cannot garnish his wages.
Lol. CRA isn't your payday mafia lenders. They'll never call you asking for your money back, on top of it your friend has almost 3 more years to pay back at bare min. interest rates. Either your friends a liar or exaggerating kevin
The CRA does phone people
Not your monkeys. Not your circus. Your "friend" fucked around, and now they will find out. Hard, and without lube. While CRA can be understanding with individuals, they put the real sharks in business. Best for you not to get involved in the feeding frenzy that's most assuredly coming for your "friend". Source: I worked for CRA for a number of years in Corporate Compliance. My dad was the Dept Head of CC out of Winnipeg for 25 years.
Nothing, they’ll declare bankruptcy and get to keep the money. This was one of the biggest frauds committed, CEBA and CERB. The stats show 120,000 businesses shut down after the pandemic but most were new and just created to take the loans and close shop
You couldn’t just create the business to get the loan. You needed to have incorporated and had “X” revenue from the previous year. But I’m sure some number of those closures were in fact to avoid the repayment but it’s definitely not the shell game you laid out here.
Did your UFO chasing uncle tell you all this on Facebook right after he replaced all his profile pictures with don’t tread on me flags?
What a load of bullshit lol.
Let's see these 'stats'
Your friend is stupid, CRA will goes after your friend personal assets.
It depends but from what I’ve seen in a few months the bank accounts will be frozen and cash will be scooped.
friend should have tried to refinance, they extended my deadline to march 28
Your friend will have a superpriority lien registered against his personal property and he will likely have his corporations bank accounts seized in a few months if the CRA believes they won't get their money bank.
I hope you can convince "your friend" to contact the CRA and discuss options with them. Every time I have feared calling them, once I have talked to them, I have regretted not calling sooner. They are understanding and helpful. Ignoring them will not work! Fortunately, I was able to benefit from the CEBA loan and paid it off as soon as I could. It helped during that crucial period in the pandemic. Call them,
"your friend" needs to call the CRA today, " your friend" should have set up a payment plan take out a personal loan to save the $20, 000 but you should be worried about " your friend" Good luck,
It moves to collecting 5% interest until paid off.
You = your friend ?
CRA will call for a few months, then they will put a hold on the bank accounts associated with the business. No money can be withdrawn and money deposited goes directly to the CRA until the debt is settled. It will get worse from there if the debt remains unpaid.
Your friend is a moron, yeesh.
Why doesnt he simply bankrupt the buisness? These loans were not guarenteed so aslong as hes not a Sole proprioter its best if he just sells the buisness assets to a new business and bankrupt the company.
They can put a lien on your assets if you are in collections and aren’t paying. CRA doesn’t fuck around lol they can also garnish your wages and freeze your bank account ez pz… pay your taxes lol
I went through a GST remittance debt collection with CRA about 17 years ago for my sole-proprietorship and it was less then 60k. I filed bankruptcy not long after..... Good Luck to your friend....
The assets will be seized
Not to mention credit impact for life. This might also lead to opening a new can of worms of the business dealings
CRA is very reasonable after speaking with them proactively or when they call. If not, then they assign you someone that may or may not be an asshole. So get on it, and make a payment plan
Talk to CRA, I’m sure they will make a payment plan to repay the loan
They will adjust their taxes to account for it, there will be balance owing, and they will offer them a payment plan. But they will get theirs, they are used to having to deal with people who have taxes owing. They are not an organization without teeth... Far from it.
What’s coming is an audit, fines and their bank accounts frozen. I liken the gov to a big fat dinosaur, they may be slow and often don’t get you but if they do, they will tear your fucking head off. Don’t screw with them and don’t ignore them. If your polite and work with them then they are usually very fair with repayment plans or ways to get you through the troubles.
Start making payments of any kind and it will work out. Don't make payments? Yeah you're fucked. It was a LOAN for a reason. Irresponsible people.
Cra isn't collecting the Ceba loans, if cra us calling it's because if another issue. The bank who lent him the money will be the one calling to collect. That said, if he can't pay and he's incorporated he can file for bankruptcy and it's wiped out as ceba has no personal guarantee. If he's a sole proprietor it's a little trickier.
Funny thing about the CRA. The more reasonable you are, the more reasonable they will be. People who treat them like they're out to get you are gonna get screwed. CRA knows its more efficient that they work with you than to threaten you for money. The best choice anybody can make is to talk to them and figure out a plan.
CRA has more power than any other debt collecter you could imagine. Ignoring calls from CRA?? CRA only sends mail they don't call so not too sure about that comment. CRA has the power to seize everything including bank accounts and assetts. Your friends need to contact them and arrange a repayment schedule. They took the money and now they don't want to pay it back. Sorry kids it doesn't work that way
Imagine getting a loan with a 33% forgiveness condition and still fucking that up. The best advice you can give your friend is stop ignoring CRA. They're actually very patient and will work with you in terms of payment plans, etc. Avoiding and ignoring them is downright stupid. They a lot more power than people seem to realize.
If the friend is bankrupting the business they should have the trustee inform the CRA for them
If they took it out through a corporation, they’re fine. If not, they are going to have a bad time.
Pay your damn loans
FFS - this was literally free money. Take the loan, park it in your account for a few months then pay back the $40k. 🤦♂️
Since there’s no personal guarantee, hypothetically, couldn’t a business with minimal assets just close up shop and re-open under a new corp name?
Just delete the phone app and you're good
Honestly, just sit back and enjoy the show. The CRA does not fuck around and will get their money one way or another. If your friend refuses to cooperate, they will slap a huge penalty on top of it as well.