The short version
- CRA collections starts when a balance stays unpaid after its due date. Letters and calls come first; legal action comes after a legal warning.
- Before taking legal action on most personal debts, CRA generally makes at least one attempt to warn you by phone and sends one written legal warning. That warning stays valid for 180 days.
- For unremitted payroll deductions and GST/HST, CRA can act right after notifying you of the debt.
- Legal actions include garnishing wages and bank accounts (a requirement to pay), registering the debt in Federal Court and placing liens on property, seizing assets, and making other people liable, such as directors or family members you transferred property to.
- The cheapest time to deal with a collections officer is before the legal warning expires into action. Call, confirm the balance, and offer a realistic payment arrangement.
CRA Collections: Powers and Your Options
CRA collections officers have powers most private lenders would trade their firstborn for: no court needed to take money from your bank, wages or customers. They also have a job that rewards getting paid, not punishing people. Most collections files end with a payment plan, not a seizure. The ones that go badly usually have one thing in common: nobody answered the phone. Here's how the process runs and where you can steer it.
How a Debt Moves Through Collections
| Stage | What happens | Your best move |
|---|---|---|
| Notice of assessment with a balance | Interest starts on the due date | Pay, or object if it's wrong; see CRA objection |
| Statements of account and reminder letters | Automated reminders | Pay or set up a payment arrangement online |
| Calls from a collections officer | A person is now assigned to the file | Call back. Have a budget ready |
| Legal warning (phone and letter) | CRA can now take legal action for 180 days | Agree an arrangement immediately |
| Legal action | Garnishment, liens, seizure, third-party assessments | Call the officer; actions can be adjusted if you agree to pay |
For income tax assessments, CRA generally can't start legal collection for 90 days after the notice. Payroll deductions, GST/HST and cases where CRA thinks collection is at risk are exceptions.
Got a collections letter?
Upload it. The Document Analyzer reads what CRA says you owe, which accounts and years, whether it's a legal warning, and the date you have to act by.
What CRA Can Do
| Action | How it works |
|---|---|
| Offset | Refunds and some benefits and credits are applied to the debt automatically |
| Requirement to pay | Your employer, bank, clients, tenants or others who owe you money must pay CRA instead; see CRA garnishment and bank accounts |
| Federal Court certificate | The debt is registered as a judgment, so CRA can register it against your home or land |
| Seizure and sale | Goods and assets can be seized and sold; rare for individuals, more common for businesses |
| Third-party assessments | Directors for unremitted payroll and GST/HST; family members or others who received property from you for less than its value while you owed tax |
| Jeopardy orders | In urgent cases, CRA can ask a court to allow immediate action |
Dealing With a Collections Officer
- Confirm the balance in My Account and ask what it includes: tax, penalties, interest, which years.
- File any missing returns. Estimated assessments ("arbitrary assessments") are often higher than the real tax; see unfiled tax returns.
- Bring a budget: income, rent or mortgage, food, transportation, other debts. CRA uses an income and expense worksheet for this.
- Offer an amount you can keep paying, plus any lump sum you can raise now.
- Get it in writing, and set up pre-authorized payments so you can't forget.
- Keep filing on time and paying new taxes. A new debt is the most common reason arrangements collapse.
Officers will often ask about borrowing, refinancing or selling assets before accepting a long arrangement. That's normal. Answer truthfully; misleading a collections officer turns a negotiation into enforcement.
Your Options If You Can't Pay
- Payment arrangement: the usual outcome; see payment arrangements.
- Taxpayer relief: cancels penalties and interest for illness, disaster, CRA errors or hardship; see taxpayer relief.
- Dispute: if the tax is wrong and the deadline hasn't passed, object; collection on disputed income tax is generally held while the objection is open.
- Insolvency: a licensed insolvency trustee can explain a consumer proposal or bankruptcy, which generally stop CRA's collection action and include most tax debts.
The big picture is on CRA tax debt.
Is It Really CRA Collections?
Real collections officers call about debts you can see in My Account, send letters on file, and accept payment through your bank, CRA's online options or a pre-authorized debit. They never demand gift cards, crypto or a wire to a personal account, and they don't threaten arrest or deportation. If in doubt, hang up and call CRA at the number on canada.ca. More on dealing with CRA is on the CRA guide.
CRA Collections Questions
Does CRA warn you before taking legal action?
For most personal debts, CRA generally makes at least one attempt to warn you by phone and sends one written legal warning letter first. The warning stays valid for 180 days. Payroll and GST/HST debts can be collected right after you are notified.
What can CRA collections do?
Apply refunds and benefits to the debt, garnish wages and bank accounts, register the debt in Federal Court and place liens on property, seize assets, and assess directors or people who received property from you.
Can I negotiate with CRA collections?
Yes. Collections officers routinely agree to payment arrangements based on what you can afford, especially before legal action starts. Interest continues until the debt is paid.
How long does CRA have to collect a debt?
Generally 10 years from the assessment, but payments and written acknowledgments restart the period.
Does bankruptcy stop CRA collections?
A consumer proposal or bankruptcy generally stops collection action and includes most tax debts. A licensed insolvency trustee can explain the effect on your situation.
Sources: CRA, If you don't pay your debt; IC98-1 Tax collections policies; How to process a garnishment from the CRA. Checked October 2026. Third-party assessment, jeopardy and insolvency points are summarized from the Income Tax Act (sections 160, 225.2, 227.1) and general insolvency rules as we understand them; get advice for your case.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.