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4 Pillars


Covid-19: Individual

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Will I continue to receive calls from creditors while Canada is under the COVID-19 restrictions?

As of right now, creditors do have the right to pursue all legal options to collect on outstanding bills.

Some agencies use automated calling systems so you may still receive these types of calls despite many of the self-isolation requirements.

If you’re out of work and can’t pay - tell them that...it will be a reality for many.

4 Pillars is working through industry organizations like the Canadian Debtors Association to advocate for a payment pause on all loans.

What should I do if I’m having a hard time making payments on my bills or loans as a result of Covid-19?

The first thing you should do is contact your lenders to explain your situation. Contact information should be available on your most recent bill.

If I’m out of work due to the COVID-19 restrictions and can’t pay my mortgage will I lose my house?

No. The major banks have implemented a program that will allow for mortgage payment deferrals for up to six months.

Contact your lender as soon as possible and discuss the options that are available to you.

Additional government programs are being launched regularly - be sure to check the Government of Canada website or contact a 4 Pillars expert for details.

I’m not able to work due to Covid-19 - what kind of support is available to me?

The primary fund for workers is the Canadian Emergency Response benefit that provides a taxable benefit of $2,000/month for up to 4 months to:

  • People facing unemployment
  • People who are unable to work
  • People who are sick, quarantined, or in directed self-isolation

Visit the 4 Pillars website or Canada.ca for full details.

Are there certain loans or accounts I should prioritize paying over others?

Everyone’s financial situation is different so it’s difficult to say for sure which specific payment will be best. Late or missed payments may be reported by your lenders to the credit reporting agencies, and the timing of reporting varies by lender. If you think you may not be able to pay a bill as a result of Covid-19 contact the lender and ask to make an arrangement. Many lenders will have programs in place to provide some relief due to these extenuating circumstances.

Should I check my credit report if I’m facing financial challenges due to Covid-19?

It may be a good idea to check your credit report to help you make decisions on which bills to prioritize. Your credit report has all your lending information (good and bad) on file for the last 6 years. A bad score may impact your future ability to get credit from a car loan to phone service or rent an apartment. You can check your credit score online using a ‘free report by mail’ option through TransUnion and Equifax. If you choose an immediate, online option there may be a cost for the service.

When will a late or missed payment be reported on my credit report?

If a payment is late or missed it might be reported by your lenders to the credit reporting agencies. The timing of this report will vary by lender and given the current situation with Covid-19 reporting times may be affected. The best approach if you think you’re going to miss a payment is to contact the lender directly and ask them when a late or missed payment gets reported. You can also take the opportunity when speaking to ask about hardship programs that provide some relief to people who are financially impacted by Covid-19.

I’m already in the middle of a consumer proposal. Should I halt the proceedings?

Sadly, there have been no specific announcements or government policies to provide any respite to payments currently.

4 Pillars is working through professional associations like the Canadian Debtors Association to advocate for the Government of Canada to take immediate action to provide relief to those struggling financially.

We know tens of thousands of Canadians are wondering the same thing, so we are monitoring and will provide regular updates.

If I receive calls or texts from CRA requiring urgent payment or action what should I do?

Unfortunately, during this difficult time, there are some people who are looking to exploit fear and uncertainty.

Individuals should be aware that cases of fraudulent communication that involve threatening or coercive language to scare individuals into paying fictitious debt to the Canada Revenue Agency continue despite the Covid-19 situation. Additionally, some current text scams encourage users to click a link to apply for employment insurance or other funds.

In most cases, the scammers will try to collect personal information from individuals that they can use for identity theft or other malicious activities.

Never respond to these fraudulent communications or click on any of the links provided.

To identify legitimate communications from the Canada Revenue Agency, be aware of these guidelines and know what to expect when the CRA contacts you:

The Canada Revenue Agency may

  • verify your identity by asking for personal information such as your full name, date of birth, address and account, or social insurance number
  • ask for details about your account, in the case of a business enquiry
  • call you to begin an audit process
  • call you to offer free tax help for your small business

The Canada Revenue Agency will never

  • ask for information about your passport, health card, or driver's license
  • demand immediate payment by Interac e-transfer, bitcoin, prepaid credit cards or gift cards from retailers such as iTunes, Amazon, or others
  • use aggressive language or threaten you with arrest or sending the police
  • leave voicemails that are threatening or give personal or financial information
Do I still have to pay my taxes at the regular time?

The Canada Revenue Agency has extended taxation deadlines for businesses and individuals according to the following schedules:

Businesses: The Canada Revenue Agency (CRA) will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after today and before September 2020.

Individuals (other than trusts): The return filing due date will be deferred until June 1, 2020. However, the Agency encourages individuals who expect to receive benefits under the GSTC or the Canada Child Benefit not to delay the filing of their return to ensure their entitlements for the 2020-21 benefit year are properly determined.

Why do people seek out the help of a Debt Consultant like 4 Pillars?

Through the combination of providing debtors with unbiased representation and long-term financial literacy training through our after-care program, 4 Pillars clients get the support and tools they need to recover from insolvency and get a real second chance as enshrined in Canadian bankruptcy law.

Covid-19: Business Loans and Subsidies

Covid-19 Wage subsidy:

For those not requiring the 75% wage subsidy, as they haven’t seen a decline in business, is the 10% subsidy available to everyone?

Organizations that do not qualify for the Canada Emergency Wage Subsidy may qualify for the previously announced wage subsidy of 10 per cent of remuneration paid from March 18 to before June 20, 2020.

To qualify for the 75% wage subsidy, do you have to show a 30% decline in gross revenue YOY and reapply each month?

Yes - eligible employers would include individuals, taxable corporations, and partnerships consisting of eligible employers as well as non-profit organizations and registered charities. An employer’s revenue for this purpose would be its revenue from its business carried on in Canada earned from arm’ s-length sources. Revenue would be calculated using the employer’s normal accounting method and would exclude revenues from extraordinary items and amounts on account of capital.

Those who receive the 75% wage subsidy are strongly encouraged to pay 100% of the employees’ salary. If this is not possible, should you instead pay them 75% of their wage (through the subsidy) as it is still better than them being laid off?

Yes. Government is recommending a 25% wage top-up by businesses, but this is not mandatory - yet.

If my business is up YOY, but I expect revenue will drop more than 30% in the future can I still apply? What if my business is new and doesn’t have YOY financials to compare?

This subsidy would be available to eligible employers that see a drop of at least 30 per cent of their revenue. Eligibility is determined by the change in an eligible employer’s monthly revenues, year-over-year, for the calendar month in which the period began.

For eligible employers established after February 2019, eligibility would be determined by comparing monthly revenues to a reasonable benchmark. Contact CRA for more details using your My Business Account portal available on their website.

Covid-19 Loans programs:

What loan programs are available to support small businesses facing financial challenges due to Covid-19?

The new Canada Emergency Business Account will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced. To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.

Do monthly payments need to be made during the 12 months with no interest?

This appears to be correct although details are still being finalized.

Has the approval process and criteria been established?

Businesses should contact their banking institution to determine how the program applies to their situation.

Should business apply at their bank or through a government program?

Interested businesses should contact their financial institution for details.

How does my business qualify for the $10K in loan forgiveness that was announced by the Prime Minister?

Details are still being finalized by Government, but for now, they have announced that through this program, The new Canada Emergency Business Account, they will provide funding to eligible financial institutions so that they can provide interest-free loans in the form of lines of credit of up to $40,000 to businesses with payrolls of less than $1 million. A quarter of this loan (up to $10,000) is eligible for complete forgiveness. https://pm.gc.ca/en/news/news-releases/2020/03/27/prime-minister-announces-support-small-businesses-facing-impacts

Make sure to subscribe for up to date information from 4 Pillars about financial programs potentially available to you to help you through the crisis.

We’re here to help during this difficult time. Our expert Debt Advisors believe in empowering clients with information and tools to help them make the best financial decisions possible – Let us help you today. Find your location here.
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