I live in Ontario. How can I stop a wage garnishment?

If you don't pay your debts, a creditor can go to court and and obtain a wage garnishment. This is what people often refer to as having their wages "garnished", although the correct term is a garnishee or garnishment.

In order to garnishee your wages, a creditor must take you to court and sue you, and obtain a Garnishment Order from the court. The only exceptions would be a Credit Union that you have given an assignment of wages, or Canada Revenue Agency (who can garnishee your wages without a court order). If you have signed a voluntary wage assignment with a pay day loan lender they can also garnishee your wages, because you gave them permission to garnishee when you applied for the loan; however, since it is a voluntary assignment, you can withdraw it, which then requires the pay day loan lender to go to court to garnishee your wages.

If a creditor has gone to the trouble and cost of going to court to get a court order to garnishee your wages, they are not likely to lift the garnishment because you agree to pay. Once the garnishment starts, they are difficult to stop.

There are Three ways to stop wage garnishment

Once a wage garnishment starts, there are three ways to get it to stop:

	Repay the debt. Once the creditor has garnisheed the full amount of your debt, or you repay it in full, including their legal and collection costs, the garnishment will stop;
	File a Proposal to creditors; or
	File for Personal Bankruptcy.

How much can be garnisheed from my wages?

Under the Ontario Wages Act, the maximum a creditor can garnishee is 50% of your gross wages. The actual amount that will be taken from your paycheque will be determined by the court, based on your financial situation, and other garnishments that may already be in effect. A typical garnishment in Ontario is 20% of your gross wages, but higher garnishments are not uncommon.

If you are threatened with a wage garnishment, or are currently being garnisheed, we recommend that you contact a licensed bankruptcy trustee immediately to determine your options. The longer you wait to deal with the wage garnishment, the more you will lose from each paycheque.

In virtually all cases a Proposal to Creditors or a Personal Bankruptcy will stop a garnishment, so we strongly recommend that if you are being garnisheed, or are threatened with a garnishment, contact a nearby representative immediately to determine your options.