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How is it possible to
"Paying the entire tax bill and making all of your mortgage deductible will result in smaller payments than paying 10% of your tax bill and leaving your existing morgage and the new loan not deductible"
The bank did turn me down before in November 03 for 50K
Who can I go to for a second mortgage.
I'm currently not paying CRA anything so how can I come out  ahead of what you're suggesting? 
My lawyer wants to send  my personal financial stuff to CRA this morning, so I need to act quickly.
Feel free to call me to discuss at 604.8xx-xxxx.
david ingram replies
First of all, if you and your wife have a businesss and cash flow, you should be able to swing it.  Joan Marsh at (604) 535-9981 in White Rock or Glen Kellaway at (604) 476-0053 in Maple Ridge are two mortgage brokers `who truly understand the mortgage interest deductible principle.
Very few mortgage brokers understand it I hate to say it but I can count the bankers who understood it on one hand in 39 years.
To answer your question 
It is a simple mathematical formula.  
A $300,000 mortgage at 5% interest which is not deductible means that you have to earn $25,000 and pay $10,000 of income tax to have $15,000 to pay the interest.
If the same interest is deductible, and you pay out $15,000, you will get a $6,000 tax refund.  
In the first instance, you HAD to earn $25,000 to pay the non-deductible interest.
In the second instance, you only need to earn $9,000 because you can actually file a T1213 form and have the withholdng reduced so that your expected tax refund can be used to pay the interest.
OR, in other words, you can simply earn $9,000, borrow $6,000 from someone, pay the whole $15,000 of interest and use the $6,000 refund to pay back the loan.
The difference will / would pay off your tax bill in 4 or 5 years and then you would have the aditional money for the rest of your life. 
You should come out to one of our Free Thursday Night seminars when we always touch on mortgage interest as a deduction.  This Thursady's seminar is on estate planning, but we can throw in a bit on mortgage interest if you ask.
Call 731-8900 to reserve a seat - 
Fred Snyder and I are giving free seminars on making your CANADIAN mortgage interest tax deductible at our new office at 
1764 West 7th
This is in the Spence Diamond Building at the corner of 7th and Burrard
and is very easy to find.
When:  Just about " Every"  Thursday Night
Time:      7 to 9 PM
RSVP:     phone (604) 731-8900 to reserve (limited to 15  to 20 people)
My time is still spent at 
108-100 Park Royal South
West Vancouver, BC
(604) 980-0321
david ingram
The original question follows.
From: David Ingram at home - bus at [email protected] 
  Sent: Monday, June 14, 2004 8:38 AM
  Subject: 10 YEAR TAX BILL-FAIRNESS COMMITEE?? - BANKRUPTCY ?? Murray Morrison, Surrey Greater Vancouver Lower Mainland Bankruptcy Lawyer - ask an income tax expert experts mutual funds, etc.
  ----- Original Message ----- 
  To: [email protected] 
  Sent: Friday, June 11, 2004 12:23 PM
  I have a total of $73,000 owing to CRA, probably 1/3 - 1/2 of that is penalties & interest over the last 10 years. I have been fighting them with different accountants since 94 & realize now I'm not going to win. I have retained council to try & negotiate with CRA collection officer & looks like our only chance is now with the fairness committee which we are in the process of sending them our personal financial information plus 4 months from our bank statements which shows about $6-$7000 going in & out. We are not sending the companies I am a shreholder of yet, but the lawyer thinks they may want full disclosure.
  We owe about $60K on our credit cards. We own 2 companies that CRA knows about. We are not employees of the companies. The companies are both in between contracts & have no cash flow, but about $100,000 in cash & stocks sitting.One vehicle is in my wife's name, the other in the companies name with a loan. My wife has been taking  a repayment of shareholders loans and or shareholders loans to live on this year so far because In Dec,2003 the CRA managed to garnishee me for these 2 companies which  both companies replied saying there was no monies to give because I am not an employee or owed any monies. 
  In Nov 2003, I went to get a $50K second mortgage to try & pay CRA but got turned down when wanted to see my personal tax assessment.In between moving out here from Ontario in 96 they managed to put a lien on the house my wife & bought which is now worth $350,000 with a $235,000 mortgage.It is jointly owned. 
  The first company I own slightly more shares than my wife, but she is the only director. The second company there are 3 shareholders & we are all directors owing about the same shares each.
  What are my options?
  Do you think the fairness committee will knock out the penalties & interest & we can make a payment proposal?
  If we got the interest waived which lets say is around $30K, I would be happy to then borrow $20 K for lump sum payment & make payment arrangements of $750 - $1000 per month for balance.
  Should I go bankrupt & if I do will the judgment on the house stand  for the monies owing?
  They also have a personal judgment registered ageist me, but nothing is entirely in my name.
  Any suggestions sure would be appreciated.
  I don't want to pay the full balance because that's not fair as the accountants thought I was wrongly accused to begin with but there is definitely monies owing from my screw ups after the initial assesment many years ago. So, I do want to try & settle this once and for all. I don't prefer to go bankrupt but will consider all options.
  david ingram replies:
  It sounds to me that you should put a mortgage on the house for the 
  $70,000 or so and pay the tax.  Get it paid now.  The Fairness committee is not likely to give you any relief other than time delays which took place because of the CRA's failure to respond on time.  
  Then since, you are self employed in reality, let us show you how to make all your mortgage interest deductible.
  Paying the entire tax bill and making all of your mortgage deductible will result in smaller payments than paying 10% of your tax bill and leaving your existing morgage and the new loan not deductible.
  The end result will be dollars in your pocket and less payments than you have now.
  Read the November 2001 newsletter at and i am sending you a copy of a recent article I wrote in Western Investor about my own bankruptcy. 
  BANKRUPTCY - or How I Found Freedom in an Unfree World
  I have just received my discharge from bankruptcy.  It isn't completely over.  I have to pay $800 a month for 36 months starting on Feb 7th, but that is a lot better than the $4,853,000 income tax bill that started it with no assets.
  Well there "were" family assets. But over a period of 21 years I went from a positive "paper" net worth of $4,800,000 to a negative $4,800,000 because of an income tax bill that I fought in court and lost and then got stubborn.
  If I had to do it again, I would have walked into a bankruptcy trustee's office 15 years ago and would have been able to get on with my life.  Instead I got stubborn and decided I would go to my grave owing the CCRA as much as the tax bill increased to before I died. 
  So the house was in my wife's name, the cars were in my wife's name, the motorhome was in my wife's name and the business was in my wife's name.  I owned nothing and was quite enjoying the position.  After all, what else could anybody do?  Well, there was one thing someone could do.  In the middle of the bankruptcy my wife left (with all the assets) but that is another article.
  Thankfully, the CCRA finally gave up on collecting it and hired a trustee to put me into bankruptcy.  I understand that I might be the first person that the CCRA put into receivership in Canada.  No trustee I have talked to had ever handled a receivership where the CCRA had put an individual into bankruptcy.  Oh sure, there were thousands where a taxpayer had declared bankruptcy because of a tax bill.  But no one knows of an individual out into bankruptcy by the CCRA.
  Now you have to know that I have sent a couple of hundred people to go bankrupt over the years.  Their situation was hopeless and bankruptcy was the only solution. And I had even had an appointment to see a bankruptcy trustee on July 22, 1999 but luckily, broke my arm and leg in a motorcycle accident the week before and never made the appointment. But I should have rescheduled and got on with my life three years earlier because it took the CCRA three more years to put me into bankruptcy and I could have done something with those three years.  You see, this article is meant to encourage you to see a trustee and pull the plug if you are fighting a losing battle, particularly if the major creditor is the CCRA. 
  If you have money problems for any reason that could include divorce, separation, unexpected tax penalty, leaky condo, company downsizing, illness, an accident or any combination of the above, you will need help.
  That help may be as simple as taking an adult education course in family finances at your local high school.  Most adult education courses include such a course and even though I taught them for years, it did not keep "me" out of that $5,000,000 bankruptcy after three of the above events occurred.
  If you need more immediate help and you happen to live in Greater Vancouver, contact a credit counselor such as Margaret Johnson at SOLUTIONS CREDIT, 200-10351 150th Street in Surrey - 1-877-588-9491 or locally (604) 588-9491. [email protected]
   As her pamphlet suggests; 
  "Budgeting involves more than just arithmetic.  It takes determination.  People experiencing financial difficulties need objective, unbiased neutral information."  
  That statement applies to your finances when you have an income and bad spending habits.  It does not cover the financial disasters that I seem to see on a daily basis.  I am talking about the $186,000 income tax reassessment for something that happened five years ago.  I am talking about the leaky condominium crisis where the debt is $100,000 and you would have to earn $190,000 and pay $90,000 income tax to have $100,000 left and that is not counting interest accruing while you are doing it.
  In this case, you need to consult competent help that does NOT start with a bankruptcy trustee, a night school course, a credit counselor or an accountant.
  Now, you need a lawyer and not "just" any lawyer.  You need a Murray Morrison, who specializes in Bankruptcy law and will work for you and give you and your family the advice it needs to preserve any assets possible and tell you what you can do and cannot do.
  BUT, why not save a couple of dollars and go directly to the trustee.
  The simple fact is that the trustee does NOT work for you.  When you sign that paper, the trustee that you searched out, the trustee that you found in the yellow pages, the trustee your banker, hairdresser, mechanic, best friend or worst enemy recommended is not working for "you".  
  The trustee is working for the creditors.  Their job is to get the most for the creditors following local federal, state or provincial guidelines that have different limits in each province and each state.
  If you are in BC, Murray Morrison is in the same office as Solutions Credit that is just behind the Guilford Shopping Centre at:
  Murray Morrison
  200-10351 150th Street
  Surrey, BC, CANADA, V3R 4B1
  (604) 930-9013 Fax (604) 588-2005
  email to [email protected]
  Talk to someone like Murray first.  Get your law straight.  Learn what you get to keep and what the limits are.  In BC for instance you can have $5,000 equity in a car.  However, The Bank of Nova Scotia (for one) will insist on seizing your car even if you have never missed a payment if the car loan is with them.  Arranging for someone else to take over the loan before you go bankrupt could make the transition easier.
  I advised one lady client to go bankrupt at this time last year for a $140,000 tax bill (which was unjust, unfair and illegal in my opinion) that we had fought for two years.  (Canada decided to tax her retroactively on her income for five years even though she was an American living in the states.  They decided she spent too much time in Canada and she had since moved to Canada officially - Bankruptcy was the only way to get rid of it and start over.)
  I was blindsided by the Bank of Nova Scotia's new policy of not allowing anyone to keep a car.  Luckily, a friend paid out the bank and loaned her the money and she kept her car.  It would have been far easier if we had known that in advance.  Her Bankruptcy Trustee was blind sided as well.  It was also the first one he had seen. 
  After you have made a decision, you need a trustee.  Remember, they are all working for your creditors.  
  Gerry Foran at Sands and Associates is a decent guy who you can deal with.  
  Gerry Foran
  E sands & Associates Inc
  1100 Melville Street
  Vancouver, BC, Canada V6E 4A6
  (604) 684-3030
  Sands and Associates also have satellite offices in Surrey, Burnaby and Langley.
  Trustees might not like me saying this but you do not even need money to do it.  They can be paid from your assets, tax refund or might not even get paid until after the bankruptcy.  While I was actually writing this, another client who I had sent to go bankrupt came in to return some material I had loaned him.  I said thank you and suggested that he must have his discharge by now.  He did not have it.  He only had a conditional discharge because he still owes the trustee $1,500 which he expects to have very soon.  Another client is in the same position.  However, they do not have a dozen creditors phoning looking for money.
  Hope this helps.  Remember - see the lawyer first - before you see the trustee.  And only talk to a lawyer who deals regularly with bankruptcy and appears in court for bankrupts protecting their rights. That means one in 100 lawyers.  There is little chance that a lawyer you are already dealing with would be the one you would use because a bankruptcy lawyer is likely too busy to do anything else.
  david ingram [email protected]
  Answers to this and other similar  questions can be obtained free on Air every Sunday morning.
  Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY"
  Those outside of the Lower Mainland will be able to listen on the internet at 
  Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. 
  Old shows are archived at the site.
  Fred Snyder and I are giving free seminars on making your CANADIAN mortgage interest tax deductible at our new office at 
  1764 West 7th
  This is in the Spence Diamond Building at the corner of 7th and Burrard
  and is very easy to find.
  When:  Just about " Every"  Thursday Night
  Time:      7 to 9 PM
  RSVP:     phone (604) 731-8900 to reserve (limited to 15 people)
  My time is still spent at 
  108-100 Park Royal South
  West Vancouver, BC
  (604) 980-0321
  david ingram
  This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer  from or or Canadian David Ingram deals daily with tax returns dealing with expatriate:
  multi jurisdictional cross and trans border expatriate gambling refunds for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa,  Thailand, Indonesia, Egypt, Antarctica,  Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
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  wizard - David Ingram's US/Canada Services
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  Calls accepted from 10 AM to 10 PM 7 days a week
  Res (604) 980-3578 Cell (604) 657-8451
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  [email protected]
  Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at If you forward this message, this disclaimer must be included."
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