Recent Posts
Categories
- Bank Loan
- Bankruptcy
- Budget
- Children's Future
- Consumer Proposal
- Credit Cards
- Credit Counselor
- Credit Report
- Credit Score
- Debt
- Debt Collectors
- Debt Consolidation
- Early Retirement
- Financial Freedom
- Financial Literacy
- Financial Problems
- Financing For Renovation
- Gambling Debt
- Holiday Debt
- Income Tax Debt
- Investment
- Money
- Money Management
- Money Saving Tips
- online fraud
- Online Scams
- Owing A Car
- Pawnshop loans
- Payday Loans
- Refinance
- Running Out Of Money
- Save Big Money
- Saving Tips
- Secure Retirement
- student loan
- Tax
- Uncategorized
- Wage Garnishment
Archives
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- November 2015
- October 2015
- September 2015
- August 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
Feeds
What Is Wage Garnishment?
A garnishment is a lawful process whereby the creditor requires your employer or other third party to turn over to them a portion of your earnings – before you get paid – until all your debt is cleared.
A creditor may attempt to seize money directly from your wages if you fail to pay what you owe them, causing the creditor to apply to court for a “garnishment” against you. This means that they can seize money in your bank accounts, your salary, or other money you own until you settle the debt.
Although wage garnishments are legal in Canada, with the exception of New Brunswick where it is prohibited, a creditor has to go through a process to initiate the garnishments. These steps include:
- The creditor must obtain a judgement from the court. The creditor presents proof of their claim against the debtor so the court can justify a garnishment.
- The court then grants the creditor seizure summons that allows them to search for assets of the value of the debt to seize.
- In the absence of any physical assets for the creditor to legally seize, the creditor will serve a ‘writ of seizure’ to your employer to start garnishing your salary before you get paid.
- The wage garnishing will continue until the debt gets paid in full
This essentially means that wage garnishment only affects debtors who don’t have any assets or equity that can be seized to pay off the debts.
How much can be seized?
Both federal and provincial laws dictate the percentage of your earnings that can be garnished and the type of assets that can be seized. The laws are somewhat similar across the country. Here’s what to expect:
- Creditors can seize any physical assets including household items and appliances – there are limitations in B.C. regarding what can be seized
- Your line of credit cannot be seized because there is no physical money to take
Going through court to obtain wage garnishment is a rather tedious process that creditors would only pursue if they felt that they were unable to reach out to the debtor. So it’s best that you don’t hide from your creditors. If you have trouble making the payments, contact a licensed insolvency trustee to discuss how you will settle the debt.
And if a wage garnishment is initiated, consider bankruptcy counselling to learn about how you can stop it by either filing a consumer proposal or filing for bankruptcy.