Understanding Wage Garnishmen
One of the legal recourses for a creditor is to garnish your wages. If you have not paid your debts or child support, garnishment is a legal option for your creditors. This is a court order that will direct your employer to send up to 20% of your earnings directly to the creditor. In the case of child support payments, the amount can be up to 50% of your wages. This will only add to the emotional stress of being behind in payments and can be embarrassing.
What is Garnishment?
In Canada, garnishment is a legal action that a creditor can take to collect the money owed to them. The process is usually:
- The creditor files a document with the court to verify that the debtor owes money
- The court issues a seizure summons, which allows the creditor to look for assets to take in lieu of the payments.
- If there are no physical assets (house, vehicle, savings), then your employer will be served with a Writ of Seizure and start garnishing your wages.
- This garnishment will stay in effect until the entire debt is repaid including interest.
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Who can garnish your wages in Canada?
Your salary is subject to garnishment if you have any unpaid debt, including:
- Child support
- Unpaid taxes
- Student loans
- Credit cards
- Bank loans
Depending on the type of debt, not all creditors need to go to court:
- Credit Union when you have given an assignment of wages. They only need to provide a copy of that assignment to your payroll manager.
- Payday Loan company when you have signed a voluntary wage assignment document. They can simply notify your employer.
- Canada Revenue Agency.
Stopping Wage Garnishment
Facing overwhelming debt can be emotionally devastating and you may feel that bankruptcy is the only answer. However, working with us to develop a consumer proposal will almost always stop the garnishment in Ontario. A consumer proposal will give you the same protections as a bankruptcy but without that decision.
We are available to confidentially discuss your financial situation and suggest viable options without judgment.
Please contact us through this site by way of chat or book an appointment, by phone
We are happy to offer the services of our debt counselor and Licensed Insolvency Trustee to help you out during this difficult time.