SHANNON ASKED: Capital One has sent me court papers that my case is now in the courts for my credit card. Is it too late to do a consumer proposal?  We have a few other credit cards as well that need to be included and have waited too long and now need help.

ANSWER: It is never too late to file a consumer proposal. You can file a consumer proposal at any time and stop any legal or collection action. By filing a consumer proposal you will be able to:

Stop all interest

Prevent any further legal or collection action

Compromise your debts

No matter where a creditor is at in the legal process, whether they have threatened legal action, commenced legal action or obtained a judgement against you, filing a consumer proposal will stop them and protect your wages. Even if the creditor has already obtained judgement against you and has started to garnishee your wages filing a consumer proposal will stop them. As I said earlier it is never too late.

Here is some additional information about wage garnishment. If a creditor wants to garnishee your wages they have to go through a legal process. The first step in this process is to issue a “statement of claim” (this is probably the court papers you received). The statement of claim shows the amount you owe and notifies you that an action has been commenced against you. In the statement of claim, you will see that you have 20 days to file a defence. This means that even if you received court papers (statement of claim) today that your creditor can’t start garnisheeing your wages immediately. The creditor has to go through a process. Assuming you don’t defend the action, the creditor will obtain default judgement against you after the 20 day period expires. A judgement is a court order that will allow your creditor to garnishee your wages.

If you received court papers don’t panic. Receiving “court papers” is only the first step in the process. It is important to note that creditors can’t start garnisheeing your wages immediately. However, if the creditors have commenced legal proceedings it is best not to wait too long and I would recommend that you take action as soon as possible to eliminate this issue and protect your wages.

Please do not hesitate to contact me to review your situation in more detail and help you to file a consumer proposal.

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