Stopping Wage Garnishment in Ontario

Halting Wage Garnishment in Ontario

When burdened with debt, one of the most distressing scenarios can be having your wages garnished. However, there are ways to prevent this from happening. In this article, we will explore the process of Stopping Wage Garnishment in Ontario.

Understanding Wage Garnishment

Wage garnishment is a legal course of action undertaken by creditors to reclaim money from individuals who owe them or against whom a court judgment has been made.

The Dynamics of Wage Garnishment

Garnishments are court-sanctioned orders that enable creditors to seize up to 50% of your wages. These orders are communicated to employers who are obliged by law to comply. The garnishment remains active until the debt is fully repaid.

Stopping Wage Garnishment in Ontario: The Three-Step Strategy

There are three primary ways to halt a wage garnishment in Ontario:

  1. Filing a Consumer Proposal: This is a legally binding agreement between you and your creditors to repay a fraction of your debt over a specified period.
  2. Filing for Bankruptcy: Declaring bankruptcy also halts the wage garnishment process.
  3. Negotiating with your Creditors: You can discuss a repayment plan with your creditors. If they agree to call off the garnishment, the process stops.

Consumer Proposal: A Detailed Look

A consumer proposal is a lawful agreement between you and your creditors to repay a part of your debt over a given time. This option will halt the wage garnishment process.

Bankruptcy: An Overview

When you declare bankruptcy, it also puts a stop to the wage garnishment process. The Bankruptcy & Insolvency Act provides an automatic stay of proceedings that protects you from further collection efforts.

Negotiation with Creditors: A Closer Look

You can negotiate a repayment plan with your creditors. If your creditor agrees to withdraw the garnishment, the process will stop. Most creditors will require a significant upfront payment vs a small long term to halt the wage garnishment.

Wage Garnishments and Banks

If you are being garnished at your bank, it signifies that a creditor you owe money to has obtained a court order for payment of a garnishment. You cannot stop a bank wage garnishment on your own. Your options are to file a consumer proposal, declare bankruptcy, or pay off the debt in full.

Child Support Garnishments

If you owe child support in Canada, it’s imperative to know the rules around garnishments. The maximum amount that can be garnished for child support is 50% of your wages.

Garnishments for Pensions, Disability Payment, or Social Assistance

When faced with wage garnishment, these sources of income are protected from creditors. However, when a court order is in place, the creditor can still take money from your bank account, even if it includes pension income.

Taxes and Bankruptcy

The Canada Revenue Agency (CRA) has the power to garnish wages without a court order. However, there are ways to halt a wage garnishment. A trustee can have the garnishment rescinded and reduce the total amount owed.

Garnishment Definition

Garnishment is a legal process for collecting a monetary judgment on behalf of a plaintiff from a defendant. Wage Garnishments allow the plaintiff (normally called the “garnishor”) to take the money or property from the person that holds that property (the “garnishee”) or loan.

In Conclusion

Stopping Wage Garnishment in Ontario is possible. It requires an understanding of the law and the right strategy. Whether you choose to file a consumer proposal, declare bankruptcy, or negotiate with your creditors, it’s crucial to act quickly and decisively.

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