Understanding Garnishees by Creditors and the Government
Garnishee orders play a significant role in how creditors and government agencies recover debts. These orders are legislated under different statutes, with some under the purview of the Civil Enforcement Act in Alberta, while others fall under Government Statutes such as the Income Tax Act and the Maintenance Enforcement Act.
Garnishee Orders: How They Work
Garnishee orders are calculated based on your net earnings. This means the amount you take home after all deductions are made. It’s crucial to understand your financial situation and how it might be affected by a garnishee order. Seeking advice from a Trustee before the garnishee order is implemented might provide alternative ways to manage these debts.
For Example, restructuring the debts could be a potential option.
The Court’s Role
The court determines the specifics of the garnishee order. However, unless the creditor is granted a different order, you are entitled to retain a minimum net pay of $800 for yourself and an additional $200 for each dependent.
Furthermore, you’re entitled to half of the difference between your net pay minus the minimum amount specified above, up to a maximum net pay of $2,400 for yourself and $200 per dependent.
Consider this scenario: if your net pay is $2,500 and there are three people in your household, you would be entitled to keep:
A minimum of $800 for yourself and $600 for dependents, amounting to $1,400.
Plus half of the difference between your net pay and the minimum amount, in this case, $550.
Which totals to $1,950 that you are entitled to keep.
Exemptions From Garnishee Orders
Certain types of income are immune to garnishee orders. These include Social Assistance, AISH, and Widow’s Pension. However, regular employment earnings can be garnished up to the amounts specified above. Unfortunately, some creditors may obtain orders to garnishee more, with income tax and maintenance debts being the most common.
With regards to the two types of debt you mentioned, the Motor Vehicle Accident Fund and EI, the extent of the garnishee will likely be at the discretion of the court.
Seek Advice
It is advisable to seek guidance from a Trustee or Counselor to avoid garnishee orders.
This article aims to provide a comprehensive understanding of garnishees by creditors and the government. By understanding the process, individuals can better navigate their financial situations and seek appropriate advice when necessary.
Remember, knowledge is power, and understanding how garnishees work can be a significant step towards financial independence and stability.
