Licensed Insolvency Trustees Can Stop Garnishments Immediately
If you have unpaid taxes or debts, then you may be losing out on a large part of your pay cheque because of an unnecessary wage garnishment. The good news is that you don’t have to suffer from a garnishment!
At Baker Tilly Ottawa Ltd., our team of Licensed Insolvency Trustees and financial experts can put an end to frustrating wage garnishments immediately. In fact, licensed insolvency trustees are the only professionals equipped and permitted to stop garnishments in their tracks.
How Do I Stop a Creditor from Garnishing My Wages?
Chances are the prospect of a wage garnishment has you worried, nervous, and anxious. A creditor is about to take a significant portion of your hard-earned pay, and you might feel like there’s not a lot you can do. If you’ve been feeling overwhelmed by credit and poor finances, a wage garnishment feels like another insurmountable challenge you simply have to live with.
Don’t worry – you still have options!
Whether you’re facing a wage garnishment or your pay is already being affected by a creditor, there are always steps you can take.
You can:
- Negotiate repayment terms with your creditor
- Obtain a loan to pay off the creditor in full
- Declare bankruptcy
- File a consumer proposal
Filing a consumer proposal with a Licensed Insolvency Trustee (LIT) offers immediate relief from creditors, puts a halt to all wage garnishments, and puts a halt to all other debt collection actions.
When you file a consumer proposal with Baker Tilly Ottawa Ltd., we can, in some cases, stop the garnishment the day you file.
Can Collection Agencies Garnish My Wages?
In Canada, collection agencies are permitted to garnish your wages to enforce a collection action. Depending on the province, the specifics vary, but in general, your creditor must first file a lawsuit, obtain a successful judgement from the courts, and make a separate court application for a garnishment order.
If you have a debt with Canada Revenue Agency (CRA), no lawsuit is required – they do not need to go to court to obtain a wage garnishment.
How Garnishment Orders Work
Once your creditor has obtained a garnishment order, it must be served to your employer, or to the party they are attempting to seize funds from.
This means that a garnishment isn’t limited to your employer. They can also be served on your bank, or, for self-employed individuals, those who you owe you payment. Regardless of which parties receive the garnishment order, they are legally bound to follow it.
What Are the Most Common Wage Garnishments?
The 3 most common wage garnishments that occur are from:
- Regular Creditors – a creditor has obtained a judgement against you in court.
- Canada Revenue Agency – The CRA has the power to issue a wage garnishment without a court order when collecting a tax debt from you.
- Family Responsibilities – You have unpaid child and/or spousal support.
Creditors may garnish up to 20% of your net wages after statutory deductions. Child and spousal support garnishees may take up to 50%. CRA garnishments are theoretically allowed to take 100% of your wage, though in practice, usually fall around 20% for most cases, and 50% in extreme cases.
How Can a Licensed Insolvency Trustee Help?
A Licensed Insolvency Trustee is the only professional who has the power to stop a wage garnishment, immediately, and without requiring an order from the court.
Individuals who participate in our programs benefit from our LITs issuing a stay to immediately stop wage garnishments, so you immediately begin to experience financial relief.