Collections Letters (Reminder → Legal Warning)
A debt has moved to collections. These escalate in stages: statement → reminder → a call → a LEGAL WARNING letter. The legal warning is the last stop before garnishment or a bank freeze — but every stage is also an invitation to make an arrangement.
⏰ The deadlines
| Legal warning letter | Usually gives ~14 days before legal action can start |
| After a legal warning | The CRA can act without further notice — garnish wages, freeze accounts, register liens |
✅ How to defuse it: A payment arrangement. The CRA accepts monthly arrangements matched to ability to pay, and collection action generally pauses while an arrangement is kept.
🛡️ Defenses & defects to check
- The CRA does NOT need a court order to garnish (unlike private creditors) — take the legal warning seriously.
- Genuine hardship? Ask for the hardship provisions; the CRA can hold collection where enforcement would prevent basic living costs.
- If the underlying debt is disputed, file the objection — collection of disputed income-tax amounts generally pauses.
💡 What the pros know
- Call the number on the letter BEFORE the deadline — the difference between calling and not calling is usually the difference between an arrangement and a frozen account.
- Scam check: real CRA collections never demands gift cards, crypto, or e-transfer, and the debt always shows in CRA My Account.
Related forms: Requirement to Pay (Garnishment Notice) · Taxpayer Relief (Your Request — Form RC4288) · Notice of Reassessment
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Decode it freeGeneral tax information, not tax or legal advice — verified against official guidance but programs and deadlines change. Confirm on canada.ca or with a licensed tax professional; free help exists at community tax clinics (CVITP).