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Category: Stop a Wage Garnishment

  • The Only Ways to Stop a Wage Garnishment without Going to Court

    debtcare1A wage garnishment put in place to repay a creditor can be a terrible thing to deal with. The knowledge that a significant portion of your income is being taken from you before you even see it, money that would usually go towards paying for things you need, can be hard to swallow, and it can be tough to know where to turn for help.

    This blog deals with wage garnishments – those put in place to deal with civil debts such as credit cards, or loans, as well as tax debts. It does not apply to Family Responsibility debts and some unique types of debt. If you want to know more about how to get rid of a wage garnishment put in place to deal with the former, here is where you need to be.

    The easiest way to stop a wage garnishment, obviously, is to pay the debt. Sure, this may seem like a very simple solution, but if you can’t pay the debt, in full, it is a simple solution that really doesn’t help you. Don’t worry, all is not lost.

    Two additional ways that you can immediately stop a wage garnishment include a consumer proposal and bankruptcy.

    In a consumer proposal, you propose an amount that you are prepared to repay your creditor with a repayment term of usually 5 years. The moment the proposal is filed by a trustee, the garnishment stops. Once your creditors accept your proposal you begin repaying. A consumer proposal can be paid in full at any time. A consumer proposal also stops interest and can even reduce the amount of debt you owe.

    In a bankruptcy, a trustee, based on an income calculation, will determine if you have to pay into bankruptcy for 9 or 21 months. During this time you will make a monthly payment to the trustee for the term of the bankruptcy and that payment is based on your income. Generally higher income earners opt for consumer proposals because bankruptcy payments end up being higher. Once you complete your obligation to the trustee you become discharged from bankruptcy. The moment a bankruptcy is filed the wage garnishment stops, interest stops and your overall debt can even be reduced.

    It is important to note that, in either scenario, you will need the services of a licensed trustee in bankruptcy; but you do not want to go to the trustee directly because they represent your creditors and you may not get the best deal. A debt counsellor can help you prepare your information and structure relevant information so that the trustee makes an arrangement that is fair for both you and the creditors.

    Want to stop a wage garnishment or learn more about how a consumer proposal or bankruptcy can help you clear those debts?

    Call DebtCare Canada today at 1-888-890-0888.

     

  • Stopping a Wage Garnishment is Easier Than You Think – Even a CRA One

    deb2Situation: You wake up Friday morning, it is payday, and it is going to be a good day. You check your bank account, realize there is money missing (your paycheque was only a portion of what it should have been), so you do some research and find out your wages have been garnished. So long good day…

    If a creditor or the Canada Revenue Agency is trying to garnish your wages (or has already leveraged a garnishment) you can stop it. Here are some things you need to know.

    Whether you owe a creditor or the CRA, your wages can be garnished. The only major difference between creditor garnishments and CRA garnishments is that a creditor needs to get a court order to garnish your wages and the CRA does not. (The creditor will have to sue you and win his case to get that order.) At that point, the process is fairly simple; once a court order is obtained, a letter is sent to your employer (or your clients if you are self-employed), and they are required by law to take a portion, sometimes up to 50%, and send it to the court.

    When a creditor garnishes you, your options are to pay your debt, make a motion to the court asking to set aside the garnishment and make monthly payments, get your creditor to agree to a voluntary monthly arrangement or deploy a federal government program to stop your creditor.

    When the CRA garnishes you, your options are to pay your debt, get the CRA to agree to a monthly payment arrangement or deploy a federal government program to stop your creditor.

    What is a federal government program?

    • There is a law called the Bankruptcy and Insolvency Act which offers various protections to people with serious financial problems.
    • Not all protections in the Act involve bankruptcy – there is also a consumer proposal option which is similar to a debt consolidation.

    Protection under this Act may mean that:

    • Your creditor or the CRA has to remove the garnishment
    • Interest will stop
    • The debt may be reduced
    • You will have a single monthly payment

    How do you begin the process of applying for protection under this Act? These are formal processes that need to be carried out correctly the very first time. Your best approach is to speak with a financial consultant to discuss the various options available to you, one with the knowledge and experience leveraging these programs to help individuals deal with wage garnishments.

    Stopping a wage garnishment once it has been put in place may seem impossible – but trust us, it is not. Call DebtCare today at 1-888-890-0888.

     

     

  • Garnishment of Wages Blog Series Part 2 of 3 – How to Stop a Wage Garnishment

    In our last blog in this series we answered the question “what is a wage garnishment”.  If you have been threatened with a garnishment of wages then you need to know that your employer is about to be notified about your defaulted debt. If your wages are already being garnished then your employer has already been made aware of your defaulted debt and you are likely feeling the financial hardship that accompanies wage garnishments. In this blog we will discuss how to stop a wage garnishment even if it is already in place.

    The three most common wage garnishments are: court ordered wage garnishments that arise because of a defaulted debt to a creditor; a garnishment of wages from the government which does not require a court order for the government to impose; and finally, wage garnishments issued as a result of family responsibility. In this blog we will discuss wage garnishments that arise because of a debt to a creditor and government imposed wage garnishments, and how you can stop them.

    When a garnishment of wages has been imposed, there are 3 common ways to stop it:

    You get your creditor to agree to voluntarily remove the wage garnishment. This rarely works if you try to negotiate this on your own. If a creditor has pursued a garnishment of wages it is generally because they feel that they have been unsuccessful at negotiating a voluntary repayment arrangement with you. Once a garnishment is in place and they start to receive payments, there is very little you can say to them to convince them to lift it.

    1. You can pay off the debt. Likely this is not a possibility because if you could pay the debt in full, you would have done that already and wouldn’t be putting yourself through the stress of having your wages garnished.
    2. You can work with a financial professional who has access to programs and resources to push your creditor to accept a repayment arrangement that is acceptable to them and that you can live with.

    Court ordered wage garnishments can be removed or reduced by going to the court and convincing a judge to give you relief. Pursuing this option can be expensive and time consuming and there are no guarantees. This is not an option in the case of a debt to the government because the government can garnish your wages without a court order.

    When there is a debt owed to the government you have far fewer options. Going to the court for relief is not an option, as previously stated. Negotiating with the government once a wage garnishment is in place is often fruitless for the same reason that negotiating with a creditor is. Once the garnishment is in place and the government starts receiving their money, there is no incentive to them to remove the garnishment.

    A garnishment of wages is almost always a symptom of a financial problem. Without the existence of a financial problem you would be paying your bills and would not have defaulted on your debt(s). If you want to know how to stop a wage garnishment you must first look at the state of your finances and start the process of coming up with a plan to deal with your financial problems.

    There are programs available that can be deployed as effective negotiating tools that can stop a wage garnishment. These programs are available through financial professionals who know how to stop a wage garnishment. When you work with professionals who are skilled at stopping wage garnishments you are able to breathe a sigh of relief as they become your personal representatives, charged with a mandate to deal with your creditors on your behalf. They can also work with you on an overall financial plan to cure your financial problems and begin the process of rebuilding.

    If you are facing a garnishment of wages and need help from a company that knows how to stop a wage garnishment, please contact DebtCare at 416-907-2582 or visit www.debtcare.ca.