Bill is 26 years old, a freelancer whose $48,000 annual income vanished overnight.
We asked Christine Williston, a financial planner and money coach at Money Coaches Canada in North Vancouver, to look at Bill’s situation.First, Bill needs to stabilize things, Ms. Williston says. This means applying for the $2,000-a-month Canada Emergency Response Benefit, contacting his creditors to defer payments if possible, and securing the roof over his head.
Bill’s next step is to contact the Canada Revenue Agency, to which he has been paying $500 a month, the planner says. “They may be able to defer the payments, waive interest or penalties or reduce his payments,” Ms. Williston says. “It appears that the CRA is not currently focused on collection of back taxes and is working hard to make sure that everyone has access to the information that they need to claim the CERB,” she adds. “It’s best to keep communication lines open with the CRA.
If he doesn’t pay, Bill could end up owing $3,320 for four months, after which the government benefit is set to end. As soon as the Ontario ban on evictions is lifted, Bill could find himself out on his ear – and his landlord could sue him in small claims court. As it is, Bill is paying $830 in rent, $55 for electricity, $120 for his cellphone, $45 for internet and $15 for subscriptions. If he could cut his phone bill from $120 to $60 and drop his subscriptions, he could cut his core expenses to $990, the planner says. That assumes he has successfully deferred the $500 payment for back taxes and that his spending on entertainment and transportation is virtually nothing for the time being.