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08-10-2019, 04:39 AM   #1
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Chase bank pulling out of Canada and forgiving customers credit card debt.

Seems that they are cancelling all their Canadian customers credit cards and simply forgiving their debt. So if you just used one of their credit cards to purchase a killer Pentax system, congratulations.


In the US forgiven debt is considered income for tax purposes. Not sure if it is in Canada.



Chase Bank tells Canadian customers that it's canceling their debt | Business | Dallas News

08-10-2019, 07:16 PM   #2
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That’s how banks should be.
08-10-2019, 08:19 PM - 3 Likes   #3
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Is it too late for me to get a chase credit card in Canada?
08-10-2019, 08:21 PM   #4
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QuoteOriginally posted by gaweidert Quote
Seems that they are cancelling all their Canadian customers credit cards and simply forgiving their debt. So if you just used one of their credit cards to purchase a killer Pentax system, congratulations.


In the US forgiven debt is considered income for tax purposes. Not sure if it is in Canada.



Chase Bank tells Canadian customers that it's canceling their debt | Business | Dallas News
Some people canít pay the principal, just the monthly interest. How are they going to pay the tax on the loan forgiveness - get a cash advance on a new card?

08-11-2019, 02:41 AM   #5
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QuoteOriginally posted by monochrome Quote
Some people canít pay the principal, just the monthly interest. How are they going to pay the tax on the loan forgiveness - get a cash advance on a new card?
If your income is low enough, even with an extra couple of thousand of forgiven debt on your tax statement you probably still won't any taxes -- at least not if Canada's system is anything like the US. On the other hand, I've never understood folks who fund large purchases with credit card debt. The interest rates really will eat you up if you don't pay them off. Having Chase shut down their Canadian cards is only a temporary reprieve if the people who currently have debt with them haven't learned their lesson.

(and I don't imagine this fixes their credit score either).
08-11-2019, 06:50 AM   #6
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QuoteOriginally posted by Rondec Quote
(and I don't imagine this fixes their credit score either).
If for no other reason than reducing their debt to available credit ratio, it will help, since there was no available credit on the cards since all the accounts were closed a while ago.
08-11-2019, 08:52 AM   #7
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From an update to the CBC story that Dallas News linked to,
QuoteQuote:
To note: Following the publication of this story, some readers inquired if the lucky recipients would have to pay income tax on the amount of debt they were forgiven. The short answer is, they shouldn't — as long as they used their cards for personal purchases, said Jamie Golombek, managing director of tax and estate planning with CIBC.
"Think of it as a tax-free windfall," he wrote in an email to CBC News.
However, customers who used their cards to buy items for their business may have to pay up at tax time. That's because their debt forgiveness could be viewed as income by the Canada Revenue Agency, said Golombek.
Chase Bank is never quoted providing the total of outstanding debt being written off, but I wouldn't be surprised if it is less than $100,000 (Canadian dollars, of course). They have had 16 months to collect balances on closed accounts and the going rate for selling credit card debt to third party enforcerscollection agencies is under 10 cents on the dollar. I've never seen either of the cards Chase cancelled.
08-11-2019, 04:49 PM   #8
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Not to worry. Chase will do what they and other banks did when they forgave billions of dollars of indebtedness to third world countries, and that is: They will pass it on to us, those who have

excellent credit, will end up paying more in interest, finance charges and late fees. They may receive a huge write off, however eventually, we will be stuck with the tab. We Americans always do.

TT

08-11-2019, 09:05 PM   #9
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QuoteOriginally posted by monochrome Quote
Some people canít pay the principal, just the monthly interest. How are they going to pay the tax on the loan forgiveness - get a cash advance on a new card?

Or a new Ferrari. Well, that may be an overstatement. A Mercedes-Benz AMG would fit the bill. (bill?) Sure, we will without doubt get the bill.

tt
08-12-2019, 02:54 AM   #10
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QuoteOriginally posted by RGlasel Quote
From an update to the CBC story that Dallas News linked to,Chase Bank is never quoted providing the total of outstanding debt being written off, but I wouldn't be surprised if it is less than $100,000 (Canadian dollars, of course). They have had 16 months to collect balances on closed accounts and the going rate for selling credit card debt to third party enforcerscollection agencies is under 10 cents on the dollar. I've never seen either of the cards Chase cancelled.
The paper value is probably quite a bit more than that. The issue is that people who haven't paid by now are unlikely to pay, even if they get threatening phone calls from a collection agency. Credit card companies don't try to collect this stuff themselves, as you say they sell it to third parties who pay significantly less than the paper value of it and try to coerce people into paying some on it.
08-12-2019, 09:05 AM   #11
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QuoteOriginally posted by Rondec Quote
The paper value is probably quite a bit more than that. The issue is that people who haven't paid by now are unlikely to pay, even if they get threatening phone calls from a collection agency. Credit card companies don't try to collect this stuff themselves, as you say they sell it to third parties who pay significantly less than the paper value of it and try to coerce people into paying some on it.
In many cases the actual goods purchased is significantly less than the paper balance owed, what with monthly late fees and compound interest at 29.99%. At that interest rate, with no payments, the balance doubles every 2.5 years.
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