Home equity used to clear CRA tax debt and stop collections

The scenario

Consider a homeowner in Durham Region who has several years of unpaid personal income tax. CRA collections have begun, and the pressure is mounting.

By the time a homeowner in this position reaches out, CRA enforcement is often already active, which makes resolving the debt quickly a priority.

Why the banks say no

Traditional lenders decline applications like this because of the outstanding CRA collections combined with bruised credit, which fall outside standard guidelines.

What we do

In a situation like this, we would arrange a private refinance used to pay the CRA balance in full and consolidate other unsecured debt, removing the most urgent source of pressure. The CRA balance in a file like this can be in the range of $85,000 to $90,000.

The outcome

CRA collections end once the balance is paid, and monthly cash flow improves substantially.

The exit strategy

The plan is to transition to a B-lender once the credit history has improved, then toward traditional financing over time.

Facing something similar? Learn more about CRA and Revenue Canada tax debt solutions, or property tax arrears.

This is an illustrative example based on the types of CRA tax debt situations we regularly help with. It does not depict a specific client, and the names, location, and figures are representative rather than actual. Individual results vary and are subject to lender approval.