Can My Wages Be Garnished if My Car Has Already Been Repossessed?
If you are wondering what happens when your creditor seizes the asset held as collateral, then threatens garnisheeing your wages, you are not alone.
During difficult economic times, an increasing number of people are faced with these challenges.
First, you ant to know whether they have the right to take a portion of your wages to complete payment of the loan.
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Breaking Down the Process
The short answer is, yes, the lender does have the right to garnishee your wages provided a certain amount of conditions are met.
For one, you had to fall behind on your loan payments and be in default.
This in it of itself can lead to repossessing the asset, under the agreed upon terms of the loan.
From there, the lender will resell the item in attempts to regain the amount going.
However, due to the natural depreciation of assets – especially vehicles – you may have an outstanding amount after this sale.
You are still responsible for the full amount of the loan you took out for the asset, regardless of whether the creditor repossessed it.
With this amount owing, the creditor is within their rights to initiate court proceedings to garnishee your wages and recover the amount.
Some Good News
Bear in mind that generally, seizing the asset and pursuing legal action is not desirable for either party.
Court proceedings are costly and time consuming; and, since all they want is payment, there is often other approaches.
You can discuss possibilities with the lender and renegotiate payment schedules.
Secondly, you can offer the vehicle as payment.
They can help you assess the values of each, considering that with a bankruptcy, they can’t garnish your pay, but they can still seize the asset.
The financial professional will assist you in making a responsible decision for your personal financial future.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?