The Reality Of Wage Garnishment In Canada

When individuals in Canada have outstanding debt obligations, the creditors involved can take legal action to collect past due payments. It is possible for a Canadian debtors to be subject to garnishment of their wages. This will happen if a creditor successfully sues the debtor and obtains a judgment against them. It can also happen if the debtor has not made their required domestic support payments or owes unpaid taxes. There are certain rules that must be followed for garnishment to be enforced.

FORMS OF GARNISHMENT
The law in Canada recognizes two type of garnishment. One is pre-judgment, and the other is post-judgment. With a pre-judgment garnishment, a creditor can attach a debtor's assets such as a bank account and property prior to receiving a court order. When a creditor has a post-judgment garnishment, they can attach all of a creditor's assets. A wage garnishment can only happen with a post-judgment garnishment. A garnishment of wages does not require a court order if unpaid taxes are owed to the Canada Revenue Agency.

HARDSHIP
Canadian law permits a debtor to request the percentage of their earnings being garnished to be reduced. The reason must be undue financial hardship. This may also be a reason for a judge to release the debtor from the garnishment entirely. If a Canadian wants to pay their creditors with an installment plan, they must attend a court hearing. During the hearing, the judge will examine the debtor's financial situation and decide if an installment plan is appropriate.

ENDING WAGE GARNISHMENT
If a Canadian's wages are being garnished because of a court order, and they don't meet the requirements for hardship relief, there are options. The debtor can pay the court judgment in full or file a consumer proposal. The last option is to file bankruptcy. A consumer proposal is when a debtor offers to pay down the debt to a certain level over a period of time. This could result in the debtor keeping their assets and ending the court ordered wage garnishment.

LIMITATION
It is common for garnishment to take from thirty to fifty percent of a debtor’s weekly earnings. This percentage can change if a debtor's wages are being garnished for child or spousal support payments. Should the debtor feel the percentage of their wage being garnished is too much, they can petition a court for an adjustment.

TECHNOLOGY
New technology makes it possible for a debtor to have pay their court ordered installment plan automatically. This is a way they can avoid the possibility of forgetting to make a payment. A debtor can also avoid financial problems with debt notification features on bank accounts and many credit cards. They will know when a purchase can put them over their limit. Phone apps have been developed that will automatically notify a person of their financial standing and any garnishment can be avoided.