A milestone, but not the destination

This morning I awoke and transferred $894.20 to Revenue Canada, clearing my entire outstanding balance. For the first time in over a decade, I owe them nothing.

It started when I went on medical leave in the late 1990s. I was gainfully employed when my doctor told me to stop working for a time. It wasn’t supposed to be for long, but it was. I had medical coverage, thank goodness. It didn’t seem a big deal at the time, but my employer was based in the United States, and as a consequence, so was their insurance company. Not being a Canadian company, they withheld no tax. I wasn’t in a state of mind where I could compensate. So, when I went back to work, I had a debt that seemed insurmountable.

I made token payments, largely servicing little more than the interest for a year when I was laid off. I found work, but it was at a far lower rate than to which I was accustomed. My payments shrunk and the debt grew. At it’s peak, what I owed would buy a nice car.

When I finally got my writing job, I increased my payments substantially and the amount I owed was steadily, but slowly, dropping.

Then two things happened early last year, one good and one bad.

The good thing was that I saw a financial adviser. To my shock, he told me that I was on the right track with my payments. If I just keep it up, I’d be entirely out of debt in four years. I was astonished. Such a thing didn’t seem within the realm of possibility. He said I was on the right track with my payments, but I was blowing it by the spending much of what I’d just paid back. I had to make sure what I repaid, stayed repaid.

The bad thing was that someone in the Revenue Canada collections department got keen and I was at least part of their focus. They told me that I’d be doubling my monthly payment. I was astonished because what they wanted was nearly a third of my net monthly income. I was upset. I was angry. But I looked at the numbers and doing what they demanded involved simply redistributing the money I was repaying, channelling more to Revenue Canada and less to my other obligations. I’d have them off my back much sooner.

I wasn’t sure I’d be able to do it, but given my new-found enthusiasm from talking to the financial adviser, I decided to give it a try. And today, eighteen months later, I made the final payment on a debt I thought was something I’d be carrying for the foreseeable future.

You’d think I’d be thrilled and glowing from having made the final payment!

I’m not.

Perhaps I was just expecting to feel more. Performing the transfer via on-line banking isn’t exactly a grand experience. It also doesn’t help that the process is slow and I won’t be able to log into my Revenue account and see the $0 balance for a few days. I think another factor is that I’ve carried the debt for so long, and thought I’d be carrying it for much longer, so I’ve had to get used to it. Yet another factor is that while I’ve cleared my debt to the government, I am not debt-free. I have a two year-old car and I’m not yet half-way through paying the loan for it, and there’s my Visa debt that’s somewhat smaller than the income tax I owed, but longer-standing. I am by no means finished, but I am significantly closer.

Yes it was a weight, but I’ve learned to function while carrying it. Combined with everything else, my burden doesn’t seem all that much lighter.

Something else just occurred to me as well. The amount I pay out every month toward my debt will not change much. The part going to the government will be added to what was already going to Visa. I know that I’ve accomplished something significant, and I’ve received more than a few congratulations already today, but my day-to-day financial situation will remain largely unchanged.

I’m not complaining, mind you. Revenue Canada would reassign my case to a new representative every year or so, and the new person would send me forms in which I’d have to detail what I was making and what I did with it. It was invasive, clinical, and I am not disappointed in the least to leave this treatment behind. Banks and credit card companies do not subject their customers to such indignities as long as they’re making payments. And I am making payments. More than the minimum, and on time.

I could give myself a break. I could go buy a bunch of stuff and coast for a bit. But that’s no-longer acceptable to me. Not only do I still have that four years time-frame in mind, but with the change in perspective I had a year ago, I realize that I deserve better than merely coasting. With a little bit of work I can do far better than merely juggling a big debt. If I continue as I have been for the last year, I can be entirely out of debt sometime in 2011. It sounds a long way away, but 2011 starts in less than eighteen months.

I can do it. Over the last eighteen months I’ve shown that I can do it. All I have to do is continue on my current course. And when I’ve done it, the thrill and glowing feelings I’m now missing will be mine!

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3 Comments

  1. Dee
    Posted July 16, 2009 at 06:45 | Permalink

    I bet once it does sink it, it will feel great! Even if you do nothing but increase your credit card payments by the amount you used to pay to Revenue Canada, like you’ve said, that will mean becoming debt-free so much sooner. And 2011 doesn’t sound far off at all. Way to go, Rick!

  2. Shawn
    Posted July 16, 2009 at 07:46 | Permalink

    Way to go Rick!!! And yes CRA are the scum of the earth and have little regard for the people who pay their salaries. They feel everyone is guilty and don’t care about innocence. they seem to work above the law and are free to abuse whom ever they can. I too was abused by them and it is not fun. Their attitude, incompetence and omnipotent powers lead to some unpleasant experiences.

  3. Posted July 16, 2009 at 12:49 | Permalink

    When I was going through this process, the first big debt to be paid off was a bit of a downer. Like you, I expected to feel something significant, but I didn’t. Not at first. Also like you, I shifted the monthly payment over to another debt I was paying off. When you’ve made a few payments to Visa at the combined payment rate (CRA + normal Visa payment), then come back and tell us how it feels. That’s when I got a bit giddy. I never imagined I’d be able to send that large of a payment, and I ended up paying the next debt off in 1/2 the time I’d originally thought. Each subsequent company I was working with was paid off faster and faster as I was able to send more and more money to them. It’s a definite snowball effect. Congratulations!

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