Where a creditor has, is threatening to garnish your wages, or served a garnishment order on your employer, you have three (3) options:
Stopping a Wage Garnishment
Stopping Wage Garnishments
How to Stop 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
What is a Garnishment?
Wage garnishments are a legal remedy for creditors (people you owe money to) to recover debts owed.
Creditors (people you owe money to) can go to court and file to have a judge order a “judgement” against you. The judgement is a court order and forcing your employer or bank to send the creditor up to 20% of your wages.
In a garnishment, the employer or bank is then obligated by law to take your money and forward it to the creditor.
How Much Can a Garnishment Take?
In Ontario, creditors like banks and credit card companies can usually take 20% of your net wages through a garnishment.
Where the garnishment is for taxes and family support payment the garnishment can for up to fifty (50) percent.
Child Support Garnishments
The maximum that can be deducted as a result of child support is fifty (50) percent.
The government can issue a “Requirement to Pay” to third parties like your employer, your bank or to contractors who owe you money, rather than a garnishment.
Those third parties must then pay the amounts directly to Canada Revenue Agency rather than to you.
The government can ask for 100% of the funds, meaning if you have money coming from other sources, they can take all of these monies for the debt, leaving you nothing.
How a Trustee Stops Garnishments
Once filed, the trustee will notify your creditors that they must stop any:
wage assignments, or
Requirements to Pay – even for unpaid income taxes!
Deductions for child support or alimony will continue and cannot be stopped where a garnishee has been put in place.
A consumer proposal or bankruptcy will stop the garnishment even if it’s already started.
Garnishees for Pensions, Disability Payment, or Social Assistance
Typically a garnishment does not allow creditors to seize your:
Where you have been sued and there is a court order the creditor receives a judgement order from the court, except for these types of income.
The creditor with a garnishment can have the money taken out of your bank account, even if those funds represent pension income.
Canada Revenue Agency or the Family Responsibility Office are allowed to seize a portion of income from pensions, disability, or social assistance.
Taxes and Bankruptcy
The Canada Revenue Agency does not have to get a court order to seize your wages. Where your wages have been garnished by the government we can have the garnishment rescinded and show you how to reduce the debt you owe.
The exceptions are;
- the tax liability is under 200,000 dollars
- the tax liability is more than 75% of your unsecured debt
In bankruptcy where the bankrupt reaches these thresholds to stop a garnishment the matter must be brought before a judge.
The judge will decide upon the conditions for the debt before it may be discharged, which may included making a payment towards the debt.
Where there are taxes owed a lien can be registered on property held or placed your home. Once a lien is registered on property it becomes a secured debt.
When a lien has been placed on your home it means that the debt cannot be discharged through bankruptcy. The bankrupt must either sell the home and pay the debt or make the payments, as if a mortgage has been placed upon the home.
While there is outstanding taxes owing the CRA can withhold payments for:
- tax refunds,
- child tax credits,
- Canada Pension Plan
- Old Age Security
- HST and tax refunds
Where you believe that you have outstanding taxes owing and you own property it is very important that you contact our offices to discuss your situation BEFORE a lien is registered.