It can be embarrassing to hear from your employer that your wages have been garnisheed. Nobody wants their employer to know their personal business, especially if you are having financial problems. A wage garnishment could also have a devastating effect on your current household budget, making it more difficult to make ends meet.

A garnishment order means that one of your creditors has taken legal action to recoup the money you owe them. A court will have decided your wages could be garnished and the amount of the deduction. In Ontario, the maximum that can be taken is 50%, which can have a significant impact on your monthly finances. Upon receipt of the order, your employer must deduct directly from your pay cheque a percentage of what you owe until the debt is paid in full.

Some creditors do not need to obtain a court order. If you owe personal income taxes or GST/HST to the Canada Revenue Agency or have given a credit union a wage assignment, these creditors can garnish your wages without going to court first.

There are three ways to stop a garnishment: pay the debt, file a consumer proposal or file an assignment in bankruptcy. Whether you are being threatened with garnishment by a collection agency or there is already a court order in place, a Trustee in bankruptcy will review your situation and provide solutions.

Call for a free initial consultation today.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)