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613
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Joined: 24/February/2012
Location: Canada
Points: 3
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Topic: Filing taxes - Spouse with tax lean. Posted: 24/February/2012 at 6:07pm |
Hi All - Great forum here!
My wife has a 10 year old outstanding school loan with HRDC. She just got a letter stating:
"HRDC has authorized the CRA to recover certain debts from any income tax refund or tax credit that you may be entitled to receive"
We have been making regular small payments.
The big question is, if we file our taxes together , will we lose the entire refund?
Can we file separatley to avoid this?
Is there a way around this?
Thanks.
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footloose
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Joined: 21/February/2012
Location: Blyth ON
Points: 81
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Posted: 27/February/2012 at 3:03am |
In Canada, you can only file a separate income tax return.
In the United States, you have the option of filing a JOINT income tax return.
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Educating one Consumer at a time
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blackcat
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Joined: 18/February/2010
Points: 28
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Posted: 28/February/2012 at 1:10pm |
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They never took my husband's return when taking mine. My debt was from before I was married, not sure if that has anything to do with it. He had no responsibility for it.
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SolveStudentDebt
Moderator Group
Joined: 05/November/2003
Location: Canada
Points: 5996
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Posted: 29/February/2012 at 3:48am |
Your spouse is not legally responsible to pay your student loan unless he has endorsed it. However, If you owe a guaranteed Canada student loan, and it is in default, and you qualify for an income tax rebate, the government will in most cases confiscate it and apply it to your outstanding student loan. Any seized money is applied to the interest in arrears first and then towards principle. THat is how it works.
If you have any provincial guaranteed student loans then the same process applies whereas the federal government is required to release a portion of income tax money to them as well.
If you have outst6anding bank risk student loans, they have no power whatsoever to seize or demand any money due and payable toy ou by the Crown.
So however you file, if there is an amount due and payable to you the only way to retain it is to demonstrate hardship with extenuating circumstances or a limitation issue.
Johnny
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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613
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Joined: 24/February/2012
Location: Canada
Points: 3
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Posted: 29/February/2012 at 3:51am |
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Thanks. The loan is from 12 years ago. I have called HRDC to try and reduce the interest from 5% and they won't budge. I tried to see if they could reduce the amount - no way. Is there anyway to catch some kind of break on the $9000 we owe??
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mr.o
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Joined: 11/January/2008
Location: Canada
Points: 42
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Posted: 29/February/2012 at 6:45am |
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Limitation issue...as in statute of limitations? Is this where you come in and would you have to deal with it only once, or every year? Thanks in advance...
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SolveStudentDebt
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Joined: 05/November/2003
Location: Canada
Points: 5996
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Posted: 29/February/2012 at 6:53am |
If you just "ask" them then they are prorammed to say "no". You have to provide a demonstration that will give them a reason to reduce it. If they determine that you are able to pay and are not experiencing hardship then they definitely will not budge. They do settle under certain circumstances but those cricumstances have to be a convincing argument that gives a reason to do so.
The government is hard to sell hardship to buit if you got it then they have to hear it if you insist that they acknowledge it and appeal for fairness and benefits of that nature.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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SolveStudentDebt
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Joined: 05/November/2003
Location: Canada
Points: 5996
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Posted: 29/February/2012 at 7:00am |
Mr. O - with Federal limitation issues it is a one time issue. Limitation issues pertaining to private student loans (bank risk) and general consumer-related credit/debt matters depend on the case. Some banks and their creditor's rights activists in law like to play super stupid and politically incorrect so it is a longer term intervention for some. Privaste banks and businesses often think they are "above" the law and can do whatever they want and that presents some complexity, but in the end they are defeated by their own stupidity.
Johnny
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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EWF004
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Joined: 02/March/2012
Location: Canada
Points: 7
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Posted: 15/August/2012 at 10:48pm |
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Hi all
Not too clear on the final outcome of the above, but I would like to ask if there is anyone out there who has had a settlement with the HRDC? I am wondering if they would reduce my outstanding loan amount in hope that I can settle my student loan once and for all? Is there a way to negotiate? are they flexible?
I am currently unemployed and have 2 children so the mean to repay the loan little but I have a one time limited amount offer from a friend to pay off the loan.
Anyone who can help with their own experiences would be a blessing! thanks all :)
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SolveStudentDebt
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Joined: 05/November/2003
Location: Canada
Points: 5996
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Posted: 17/August/2012 at 6:34am |
I do this work for people. Yes, it is possible but there has to be a reason for the government to agree. There has to be a hardship involved in it. If you are gainfully employed and thinking about making an offer just for the purpose of saving a buck then they will reject you. Are they flexible? They are very stiff, just put it that way.
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Solve Student Debt specializes in solutions for students and graduates in student loan default, and those at risk of defaulting. solvestudentdebt.com
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