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While it’s common for debts to build up slowly over time, there are often cases where people are confronted with debts they were not expecting. Vancouver Licensed Insolvency Trustee Blair Mantin visited Global News to talk about some common scenarios where people are hit with unplanned debt – and what can be done about it.

Watch the Global News clip below, and read on for more information about making a plan to deal with unexpected debt:

While not exhaustive, here are some examples of debts that are often unexpected:

Canada Revenue Agency (“CRA”) Debt

For some people (typically self-employed consumers) a balance owing to the Canada Revenue Agency is anticipated each year and savings are put aside to pay the money owing. For others, CRA debt can arise without warning, often due to one of the following scenarios:

  • A new accountant has made mistakes or tried to use deductions that were not allowed;
  • You had additional employment income and not enough tax was withheld at source;
  • You are newly self-employed and unaware of filing or payment requirements.

CRA is a very powerful creditor – interest and penalties for money owing accrue daily and they can seize bank accounts and/or wages for unpaid tax obligations nearly overnight.

  • If you’re unable to pay off Canada Revenue Agency debt in full (they’ll often allow a maximum of six months’ time for repayment), a Licensed Insolvency Trustee is your best ally to deal with outstanding tax debt. A Consumer Proposal is the only settlement CRA will accept, or alternatively a personal bankruptcy can also write-off CRA debt.


By definition, an accident that has resulted in a big balance owing to ICBC was something that you didn’t plan for! We often help people who were denied insurance coverage due to violations in terms of coverage and as a result have ICBC debt.

  • Debt to ICBC is essentially government debt – there is no expiry on the debt, no statute of limitations applies to forgiving the balance, and ICBC generally is not empowered to make a deal with you to reduce amounts owing, especially if they are trying to recover claims paid out due to an accident. Furthermore, ICBC will often not allow you to renew your driver’s license or insurance coverage until the debt has been cleared.

The best thing to do is to be aware of your legal options. If you’ve been assessed the debt inappropriately, talk to a lawyer about disputing the debt. If the debt is valid, ICBC will often work with you on a payment plan for the full amount.

  • If you’re unable to pay the full amount owing, a Consumer Proposal or personal bankruptcy can be used to reduce and/or eliminate ICBC debt.

“Life Event” Debt

Few people have emergency funds or savings at the ready, leaving them vulnerable to various life events, with separation/divorce being the most frequent unplanned life event that causes a financial strain.

  • Two main financial impacts from divorce:
    • Marital debts may be split – one partner can seek payment from the other for debts incurred jointly;
    • Cost of legal proceedings – hiring lawyers and engaging in custody or asset battles can quickly deplete financial assets;
    • Cost of reestablishing oneself – significant up-front costs for each partner in setting up two new separate households and meeting the costs of living now, on half of the shared income.
  • Though you can’t (and perhaps shouldn’t) plan for the dissolution of your relationship, you can take steps each day to build financial transparency between partners so that each person has a clear sense of where the couples’ finances are at.
  • The breakdown of a relationship can be stressful and all-consuming, leaving each partner vulnerable to making bad financial decisions, especially in regards to debt. Take the time to get guidance – if you’re still amicable, meet together with a Licensed Insolvency Trustee to assess the scenarios of who will owe what as both partners move forward separately.

With a network of local offices throughout the province, the caring debt professionals at Sands & Associate are here to help you when you need a plan to get out of debt. Find out how you can get a financial fresh start today, book your free debt consultation now.