A list of alternatives to CERB repayment if you cannot pay it back

A list of alternatives to CERB repayment if you cannot pay it back

What is CERB? 

COVID-19 has caused a great deal of economic stress all over the world. Amid this pandemic, a financial support program called CERB – Canada Emergency Response Benefit was introduced in Canada. The CERB repayment program provided immediate assistance to employed and self-employed Canadians directly affected by COVID -19. Individuals who met specific criteria like job loss and salary reduction received $2,000 for four months between Mar. 15 and Sept. 26, 2020. The process included verifying CERB applications by the Canada Revenue Agency (CRA) to confirm eligibility.

Are you affected by CERB repayment? 

However, in some cases, claimants who have received CERB payment and were later found ineligible were contacted to make arrangements to repay the appropriate amounts. The Canada Revenue Agency had already begun sending out T4A tax reporting slips to the CERB recipients in 2020. About 441,000 letters were sent by CRA in December 2020 asking for the CERB repayment. The CRA said that if the recipients did not pay by 2020 year-end, they might have to pay income tax on that money in 2021. Hence, they might have to wait until 2022 for those tax adjustments. In 2022, the Canada Revenue Agency has again started to send out a new round of letters to pandemic aid recipients to check their eligibility for help and warn of the potential need for repayments. But what happens if you cannot pay it back? 

Role of Licensed Insolvency Trustees

As an initial step, individuals who received the notification of CERB repayment reached CRA to know how much they ought to pay back and whether they could set up a payment arrangement. But, some Canadians are already struggling to meet their minimum debt payments, and another debt payment would badly affect their financial life. One such case involved a Regina couple who depended on CERB during the pandemic and now will need to repay $12,000 to the federal government. Suppose the individuals could not solve this issue on their own. In that case, the Licensed Insolvency Trustees(LIT) play a crucial role in discharging all or a part of their CERB debt by filing for insolvency. 

Dana MacRae | Licensed Insolvency Trustee is happy to offer you alternative options if you cannot afford to pay the CERB repayment. 

Bankruptcy or Consumer Proposal? 

Canadians usually get rid of debt arising from taxes and government benefits by filing for insolvency. The same is the case with debt arising from CERB repayment too. If some fraudulent activity is involved and you cannot repay, it should be a debt dischargeable in a bankruptcy or a consumer proposal. Only licensed insolvency trustees can assist a consumer proposal or bankruptcy in Canada. 

Contact Dana MacRae | Licensed Insolvency Trustee to file a consumer proposal or bankruptcy now. 

Administered by LIT, in a consumer proposal, the debtors usually offer their creditors a percentage of what is owed to them, extend the time you have to pay off the debts or even both. You only need 50 percent of creditors to agree to the offer to become legally binding for all of them. Another legal process, bankruptcy, helps people who can no longer pay their debts by liquidating assets to pay their debts or creating a new repayment plan. You do not have the provision to keep all your assets in a bankruptcy proceeding, but depending upon the province you live in, you might be able to keep some of the equity in your home, your car, tools, and more. 

Are you considering filing for a consumer proposal or bankruptcy? Call for a free and confidential consultation at Dana MacRae – 1-800-665-9965. 

A Final Verdict

There are several reasons Canadians might be considered ineligible, including having applied for and received the same benefit through Canada Revenue Agency and Service Canada. The CRA later acknowledged some confusion on who was eligible for the CERB repayment in the initial days after the program was launched. 

Are you facing any issues with debt related to CERB repayment? Contact Dana MacRae | Licensed Insolvency Trustee to know more.