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Tag: wages garnished

  • How Can a Business Have Their Wages Garnished?

    wage-garnished-smWage garnishments, in the credit collection world, are all too common an occurrence. As a form of collection action, garnishing a person’s wages is often an effective way to retrieve a debt owed, and many collectors view it as the best way to collect. Usually these come in the form of personal wages being garnished, so when businesses have their monies garnished they are often surprised and wondering how this has happened.

    Can a business have its monies garnished? Yes, and this can be very embarrassing, not to mention damaging to your professional reputation.

    If you, as a business, owe a creditor money, and they’ve gone through the appropriate channels to retrieve it with no luck, they may just turn to a collection agency to have your business’s monies garnished. This usually requires a court order which then gives the collection agency the legal ability to seize monies owing to your business, freeze money in your business bank account, or other money your business has, to repay its debt. If, however, you owe the Canada Revenue Agency, a court order is not required and the CRA can levy a wage garnishment whenever they feel like doing so – so be very careful with these tax debts.

    Once the court order is obtained, a notice of this garnishment is sent to your customers, and a portion of your receivables are to be directed to pay the debt, rather than going to your business. Not only does this take away from your business income, making it difficult to meet payroll obligations or pay your other accounts, it also reflects poorly on your business as your customers are made fully aware of the unpaid debt.

    There are only a few ways to get a garnishment lifted:

    1. Pay the debt in full
    2. Negotiate with the other side to reach a favourable settlement
    3. File a consumer proposal or bankruptcy

    Many people opt for a consumer proposal in these circumstances because a proposal:

    • Removes the wage garnishment
    • Stops interest
    • Often reduces the overall debt
    • Stops other collection action
    • Allows for a voluntary monthly payment that you can afford

    If you owe a debt and as a result your business’s wages are being garnished, ignoring the problem will not make it go away. The best thing that you can do is to resolve the issue and have the garnishment lifted as soon as possible.

    To find out more about your options and to get started, call DebtCare today. We can help: 1-888-890-0888.

     

  • What to Do if Your Wages Are Being Garnished

    Wages Being GarnishedIf your wages are being garnished then no doubt you are feeling the pain. Having your wages garnished results in severe financial problems and even embarrassment at work. There are different types of wage garnishments that have financial impacts.

    If your wages are being garnished as a result of family responsibility there is little that you can do outside of working with a lawyer to try to get the amount of the wage garnishment reduced or to work towards paying up your arrears and then moving to a voluntary monthly payment plan. There isn’t really any protection for individuals who have unpaid child support. Child support wage garnishments can consume up to 50% of your income.

    If your wages are being garnished as a result of a judgement in small claims court you do have some options. You can make a motion to the local small claims court and ask a judge to reduce the amount of the wage garnishment or to lift it and allow for an agreed-upon voluntary monthly payment. While this can be effective, the courts do have the final say, and can say no. It also depends on your creditor. You can also look at working with a financial consultant to make a proposal to your creditor so that they agree to lift the judgement. This can be quite effective and even result in the interest that is accumulating on your debt being frozen. A garnishment imposed through the small claims court can consume up to 20% of your wages in most Canadian provinces.

    If your wages are being garnished by the Canada Revenue Agency (CRA) this is by far the most dangerous type of garnishment. A CRA garnishment can consume up to 50% of employment income and up to 100% of secondary income. For example, if you are a contractor the CRA can demand that your client send 100% of your earnings. This is the most dangerous type of garnishment because a CRA imposed garnishment can literally make it impossible to pay for the necessities of life, such as food, transportation and shelter. Those who are self-employed may lose business or have clients simply walk away because dealing with the garnishment is just too much hassle.

    Like judgements issued through small claims court, a good financial consultant can also help you to combat a CRA garnishment. There are programs and protections available that can stop a garnishment (even one issued by the CRA), freeze interest and even reduce the amount of the debt.

    Do not continue suffering in silence. If a wage garnishment is holding you back, help is only a phone call away. For more information please call DebtCare Canada at 888-890-0888 or visit www.debtcare.ca.

  • Stopping a Garnishment of Wages in Canada

    Thousands of Canadians have their wages garnished each year for a wide range of reasons. A garnishment of wages in Canada can occur as a result of unpaid family responsibility, judgements that occurred as a result lawsuits (in Small Claims Court or Superior Court) or as a result of debt owed to the government. The most common government debt that results in a garnishment of wages in Canada is a tax debt that is owed to The Canada Revenue Agency.

    Stopping a garnishment of wages in Canada that is related to unpaid family responsibility is very difficult and can only be achieved in one of three ways: 1) through paying the child support arrears, 2) through going to court  or 3) the parent of the child who is owed support waives the support (in some cases).

    If you have a judgement against you in the Small Claims Court, your wages can be garnished up to 20% of your net earnings. If the Canada Revenue Agency imposes a wage garnishment against you, your wages can be garnished up to 50% of your gross earnings and up to 100% of any secondary earnings.

    A wage garnishment can cause financial devastation because the average Canadian will find it difficult to continue to pay for basic living expenses like shelter, transportation and food once his or her income has been reduced by 20%-50%.

    Where Canada Revenue Agency is concerned, it can be difficult to get the CRA to voluntarily lift a garnishment of wages once in place. The Canada Revenue Agency will often demand that the tax debt be paid in full or that a substantial lump sum payment be made before they will consider stopping a garnishment of wages. When a taxpayer owes thousands of dollars, the prospect of raising the money can prove impossible, leaving the taxpayer feeling powerless.

    Where a Small Claims Court judgement is concerned, stopping a garnishment of wages can be expensive because it will often involve returning to court and while you can represent yourself in Small Claims Court, many people will retain legal representation when attempting to get a wage garnishment reduced or lifted to increase their chances of success.

    There is another way to stop a wage garnishment issued by the Small Claims Court or The Canada Revenue agency which may be possible without going to court.

    Through a debt consultant you may be able to qualify under a Federal Government Program to deal with a debt that has arisen from a Small Claims Court Action or Canada Revenue Agency tax debt and that will involve stopping a garnishment of wages. When participating under one of these programs any collection action being taken against you by unsecured creditors will be “stayed” giving you an opportunity at a fresh start. The best course of action will depend on the amount of debt you have, your income and assets. Qualifying under one of these programs may end up being the easiest way for you to stop a garnishment of your wages.

    For more information about stopping a garnishment of wages in Canada please call DebtCare Canada at 416-907-2582 or visit www.debtcare.ca

  • Wage Garnishments in Canada – How to Stop a Garnishment on Your Wages

    Thousands of Canadians have their wages garnished each year. In the past few years there have been more instances of individuals having their wages garnished because of the turbulent economy. Wage garnishments in Canada occur when one party believes that another party owes him or her money and pursues enforcement action.

    Wage garnishments in Canada are generally issued in one of three ways.

    The first most common reason a wage garnishment is issued is when a debt is owed to the government and the individual is unable to make a satisfactory, voluntary repayment arrangement. Some examples of this are: tax debt owed to The Canada Revenue Agency or The Minister of Finance or a debt owed to the Province and/or Federal Government for an unpaid student loan. If the government wants to place a garnishment on your wages, they don’t have to obtain a court order to do so. If you want to know how to stop a garnishment on your wages, the answer is pretty much black and white. You either have to make an acceptable voluntary repayment plan with the government so that they agree to lift the garnishment on your wages or participate in a Federal Government program to seek debt relief. Wage garnishments that are issued by the government can be applied at up to 100% of your wages.

    The second most common reason that a wage garnishment is issued is when one party sues another party in the Superior Court of Justice and is awarded judgement. Once awarded judgement he or she can apply to garnish the individual’s wages. A common occurrence is when an individual defaults on a debt to a creditor and then the creditor sues him or her in the Small Claims Court. When a wage garnishment is issued through the Small Claims Court in Ontario your wages can be garnished up to 20% of your net earnings. If you want to know how to stop a wage garnishment issued by the Superior Court you have three choices. Make a voluntary payment plan arrangement with the party who sued you where they agree to lift the wage garnishment, to make a motion to the Court offering a voluntary payment plan and asking that the wage garnishment be set aside, or by applying to a Federal Government program for debt relief.

    The third most common reason wage garnishments are issued is as a result of child support arrears. If you want to know how to stop a wage garnishment for child support arrears you have only one choice and that is to apply to the Court to have it removed. This can be very challenging to accomplish. A Federal Government program will not stop a wage garnishment for unpaid child support.

    The fastest most effective way to stop a wage garnishment is through a Federal Government program. The benefit achieved by leveraging a Federal Government program to stop a wage garnishment is that the garnishment will be stopped, interest will be frozen, in many cases you can have the principal amount of the debt that you owe reduced and make a voluntary monthly payment.

    Participating in a Federal Government program will require that you include all debt that you owe. If you have debt to other creditors like credit card providers, loan providers, unpaid cell phone bills etc., these debts will also be covered under the Federal Government program. This will mean that they too will have their interest frozen and in many cases the principal debt reduced. In the event that you had several debts you would make a single monthly payment under the Federal Government program.

    If you are having a financial problem and your wages are being garnished it could lead to increased financial hardship. You don’t have to suffer and there are options available.

    For more information about wage garnishments in Canada and how to stop a garnishment on your wages please contact Michael Goldenberg at DebtCare Canada by calling 416-907-2582 or visit www.debtcare.ca.