Wage garnishments, or an assignment of wages is something that few people truly understand until it is too late and they are being garnished, or until they have been threatened with a garnishment. In this article, we are going to cover everything you need to know about wage garnishments. We will start with the most requested topic…
How to stop a wage garnishment
Fortunately, there are always options available to stop a wage garnishment. This is true whether you are simply being threatened, if you have been served court paperwork, or if the wage assignment has already began.
The main ways you can stop a wage garnishment are:
- Negotiate directly with the creditor to have them stop the garnishment and to pay them directly.
- Get a loan to to pay off the creditor in full.
- Negotiate directly with a creditor to offer them an informal settlement.
- File a consumer proposal.
- File a bankruptcy.
It should be noted that options #1 and 2 can be very difficult to implement if a creditor has already served you with court paperwork or if the garnishment is already in place. Option #3 can be very effective, however, most consumers do not have the ability to come up with a lump sum of money if they are being garnished.
If you have already tried options #1 through 3 and are still at a loss but aren’t quite sure whether you should look at a proposal or a bankruptcy we have written an extensive article on a consumer proposal vs bankruptcy.
How can I stop a wage garnishment immediately?
Stopping a wage garnishment immediately can only occur when filing a consumer proposal or a bankruptcy. Both of these options come with an immediate stay of proceedings. This means that creditors can not longer collect any money from you. Typically speaking, any money that is taken by your creditors after you file a proposal or a bankruptcy is to be returned to you. However, there may be a delay.
Can you stop a garnishment after it starts?
Yes – by using one of the methods listed above, you can stop a garnishment after it starts. However, the fastest way to stop wage garnishment after it starts is by filing either a consumer proposal or bankruptcy through an LIT.
Does a garnishment hurt your credit?
Judgements do get reported to your credit bureau and so can have a negative effect. More often than not, the missed payments that caused the creditor to want to take you to court and obtain a judgement cause the negative impact to your credit.
What income cannot be garnished?
Typically speaking, government income (CPP, OAS, EI, etc) cannot be garnished by non-CRA creditors.
Can a garnishment be reversed?
A garnishment can be reversed, or stopped, with either the approval of the creditor or by filing a consumer proposal or bankruptcy
Does CRA use wage garnishments?
Yes – CRA does use wage garnishments. Unlike other creditors they are not required to go through the court system and can garnish incomes that other creditors cannot.
How much can be garnished from my paycheck?
Every province varies, so it is best to check in with your specific province. In Nova Scotia creditors can garnish up to 30% of an individuals gross wages.
This article was written by David Moffatt. A Senior Debt Relief Specialist with 4 Pillars Halifax. 4 Pillars has assisted in creating plans that have helped save Canadians over $1 Billion dollars of consumer and tax debt since 2002. We believe that no consumer should have to struggle with the stress of overwhelming debt. Our debt restructuring strategies can help you cut your debt by up to 80% with less than 3% of our clients ever getting into deep financial difficulties again.
We are proud members of the Canadian Debtors Association. We work for you, not your creditors.
If you are struggling with debt please reach out. It hurts to continue to suffer financially. 4 Pillars Halifax services Halifax, Dartmouth, Bedford, Sackville and the entirety of HRM.
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