Are you experiencing a wage garnishment due to unpaid loans or debts? Our trustees can stop the garnishment before the next payday.
Stopping Wage Garnishments
How to Stop Wage Garnishments
Here are 3 ways to stop a wage garnishment in Ontario:
- File a Consumer Proposal: A consumer proposal is a legal agreement between you and your creditors to repay a portion of your debt over a period of time. This option will stop the wage garnishment process.
- Declare Bankruptcy: Filing for bankruptcy will also stop the wage garnishment process. The Bankruptcy & Insolvency Act provides an automatic stay of proceedings that protects you from further collection efforts.
- Make a Deal with Your Creditors: Negotiate with your creditors for repayment of your debt. If your creditor agrees to withdraw the garnishment, the process will stop.
Most creditors will not remove a garnishment order until they receive full payment. To make a deal with creditors, the creditor will usually want a large upfront payment vs a small long term to stop the wage garnishment.
Employers is required by law to comply with the garnishment order UNLESS they receive a court order from a trustee authorizing them to stop withholding your pay.
Where a creditor notifies you of their intention to obtain a judgment against you, don’t ignore it. Instead, talk free of charge with one of our Licensed Insolvency Trustees to stop the action right away.
If you’re facing a wage garnishment and need to stop it fast, YanchDey can help you today.
What are Wage Garnishments?
Wage garnishments are a legal process used by creditors to collect money from individuals who owe them money or have a court judgment against them. If you’re facing a wage garnishment, it’s important to understand the following:
- Wage garnishments are court orders that allow creditors to take up to 50% of your wages.
- Employers are notified of the garnishment and are required to comply with the court order.
- The garnishment will only stop once the loan is paid in full.
In Canada, a wage garnishment is the most common form of garnishment. If you’re been notified of a wage garnishment, the creditor is trying to take a portion of your wages through your employer or your bank.
Wage garnishments can be stopped with a Insolvency Trustee with a consumer proposal or bankruptcy, both of which will stop a garnishment. You can also negotiate a repayment plan with your creditor, although most will be reluctant to stop the garnishment without full payment.
It’s important to take action as soon as possible if you’re facing a wage garnishment. Contact a Licensed Insolvency Trustee to explore your options and take control of your finances. Don’t let a wage garnishment control your financial future
Paul’s paycheque never seemed to cover all his expenses.
His credit card debt has grown to the point where he’s been unable to pay the bill.
Now after 3 months of not paying, he has received a Garnishment Order notice at work that his pay is going to be garnished. Where he was receiving $1250 every two weeks, the wage garnishment is going to take $250 dollars each pay until the debt is paid, 20%.
Paul realizes that he has to address his debt, and on advice contacts YanchDey. The trustee explains to Paul that since he has a good job he can do a consumer proposal, and stop the garnishment. As well Paul learns that the consumer proposal will drop his debt from $20,000 to 6,000, reducing his monthly payment down to $100 per month.
Wage Garnishments & Your Bank
Where you are being garnished at your bank, it means that a creditor you owe money too has obtained a court order for payment of a garnishment.
Here’s what you need to know:
- The creditor can take the garnishment order to your bank. The bank is legally required to send your garnished wages to the creditor until the full amount owing is paid off.
- You cannot stop a bank wage garnishment on your own. The only options are to file a consumer proposal, declare bankruptcy, or pay off the debt in full.
- Contact our Licensed Insolvency Trustee to explore your options and take action to stop the garnishment.
At our firm, we understand the stress and financial burden that comes with a wage garnishment. We offer fast and effective solutions to stop the garnishment process. Call us today at 905-721-7506 to take control of your finances and stop bank wage garnishments.
★★★★★ YanchDey stopped the garnishment even before payment was taken, and saved me over $10,000. Thank you everyone at the Oshawa office, you changed my life! Rocco S. Toronto
How Much Can a Garnishment Take?
If you’re facing a wage garnishment in Ontario, it’s important to understand the laws governing the process. Here’s what you need to know:
- Creditors like banks and credit card companies can typically garnish up to 20% of your net wages.
- If the garnishment is for taxes or family support payments, the percentage can be as high as 50%.
Don’t let wage garnishments take control of your finances. Contact us today to explore your options for stopping garnishments and taking back control of your financial future.
Child Support Garnishments
If you owe child support in Canada, it’s important to know the rules around garnishments. Here’s what you need to know:
- The maximum amount that can be garnished for child support is 50% of your wages.
- Instead of wage garnishments, the government can issue a “Requirement to Pay” to third parties like your employer or bank. These third parties must then pay the amounts directly to the Canada Revenue Agency, rather than to you.
As insolvency trustees, we understand the stress that comes with child support garnishments. That’s why we’re here to help you explore your options and find a solution that works for you. Contact us today to learn more.
Garnishees for Pensions, Disability Payment, or Social Assistance
When faced with wage garnishment, these sources of income are protected from creditors. Typically, creditors cannot seize or garnish the following sources of income:
However, when a court order is in place, the creditor can still take money from your bank account, even if it includes pension income.
In addition, the Canada Revenue Agency and Family Responsibility Office are authorized to seize a portion of income from pensions, disability, or social assistance. It’s crucial to understand your rights and options in these situations.
Taxes and Bankruptcy
The Canada Revenue Agency (CRA) has the power to garnish wages without a court order. However, there are ways to stop a wage garnishment:
- A trustee can have the garnishment rescinded and reduce the total amount owed.
If you owe taxes, they are typically considered unsecured credit and can be discharged in bankruptcy. However, there are some exceptions:
- The tax liability is under $200,000.
- The tax liability is more than 75% of your unsecured debt.
If your tax debt reaches these thresholds and you file for bankruptcy, a judge must decide the conditions for the debt to be discharged, which may include making some payments.
Where you have outstanding taxes owing, the CRA can withhold payments for:
- Tax refunds
- Child tax credits
- Canada Pension Plan
- Old Age Security
- HST and tax refunds
It’s important to contact a professional to discuss your situation before a lien is registered on your property.
Property owners can be especially at risk as a lien can be registered on any property you own or placed on your home, which then becomes a secured debt. This means that the lien cannot be discharged through bankruptcy, and you must either sell the property or make payments as if a mortgage had been placed on it.
Wikipedia defines Garnishment as: a legal process for collecting a monetary judgment on behalf of a plaintiff from a defendant.
Wage Garnishments allow the plaintiff (normally called the “garnishor”) to take the money or property from the person that holds that property (the “garnishee”) or loan.