Dealing With Creditors to Stop a Garnishment of Wages
The vast majority of banks and other financial institutions are happy to let their customers handle their own loan repayments.
This sort of method has worked for a very long time, and it’s fairly uncommon to find people breaking the agreements they’ve made, though this isn’t always the case.
If you’ve been struggling to pay the money you owe for quite a long time, you could find yourself facing wage garnishment.
But what exactly does this mean, and are there any ways to stop it?
Let’s take a look.
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What Is Wage Garnishment?
When a creditor is struggling to recover money which is owed to them, they will often file lawsuits which result in a wage garnishment.
This is a court order which is presented to your employer, forcing them to pay a set percentage of your wage to the people you owe money to.
This takes you out of the picture, ensuring that you can’t miss a payment unless you lose your job, and can often be a very stressful process to go through.
Cutting A Deal vs. Consumer Proposals
Understandably, most people will feel strongly against the idea of having a wage garnishment put in place, and there are a couple of different ways to fight this process; cutting a deal yourself or using a professional drafted consumer proposal.
Cutting A Deal
If you’re able to talk to your creditor and come to an arrangement before a wage garnishment is put into place, you may be able to escape this problem entirely.
Once a wage garnishment has been put in place, though, it is very unlikely that your creditors will be willing to lift it.
They will have spent money to issue a court order in the first place, and the payment from your employer is far more likely to come on time than those from you, at least in their view.
This makes it unlikely that you’ll be able to fight a wage garnishment on your own.
A Consumer Proposal is covered under the Bankruptcy and Insolvency Act in Canada, providing a formal debt settlement process which will come with a stay of proceedings.
This means that filing a consumer proposal will automatically halt a wage garnishment, forcing your employer to give you all of the money they owe, rather than sending it to your creditors.
Unlike filing for bankruptcy, a consumer proposal will allow you to keep your assets, while also giving you some degree of control over the way that your debt is handled.
Getting Help From Bankruptcy Canada
Our dedicated team of legal experts can provide confidential and obligation free advice, giving you the opportunity to explore all of your options before you choose the financial path which is right for you.
Wage garnishment can be a challenging thing to live with, but it isn’t as hard as you might think to get one lifted.
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