If you owe money to your creditors and do not make payments your creditors may take legal action against you. The result of this legal action is something called a judgment. A judgment is a court order that allows your creditors to deduct payments directly from your wages and to seize assets, otherwise known as wage garnishment.

In order for your creditors to actually garnish your wages, creditors must do the following:

Go to court. Taking debtors to court is always the last resort as it is costly and time-consuming.

Get a judgment order. This order validates that the debt is yours and that you are obligated to pay. 

Return to court.  This is when they get an enforcement order for the garnishment or other means of collection.

Investigate. Creditors also hire companies to investigate public documents regarding property ownership and income. If they have reason to believe you have sufficient income or assets, they will come after you.

Many people assume that filing a Debt Management Plan with a credit counsellor will stop wage garnishment. That is NOT true. The only way to stop wage garnishment even if the process has already begun, is to do one of the following:

Making a consumer proposal

Filing personal bankruptcy

Paying creditors in full

The maximum amount your wages could be garnished by creditors according to the Ontario Wages Act is 50% of your gross monthly wages. There are exceptions from wage garnishment. If you are collecting employment insurance, social assistance or receiving pension payments, your wages cannot be garnished.

If you’re being threatened with wage garnishment, contact us today to stop all creditor action and gain a fresh financial start. 

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