Happy Halloween! The Scariest Collection Action of All: Garnished Wages
In the spirit of Halloween, we decided to dedicate this blog to the most common – and some would even say terrifying – enforcement action a creditor can take against you: a wage garnishment. Yes, it sounds scary and it can be. Having your wages garnished is an extremely unpleasant reality when you’re already struggling with debt.
Having your wages garnished means that a creditor has received a court order to obtain unpaid debts from you. This shows up on your credit report, and your employer will receive notice that they should start taking money from your pay to send your creditor. Not only can this be financially debilitating, it may also be potentially embarrassing at work.
Depending on who your creditor is, the amount of the garnishment and process taken to garnish your wages will be different. For example, the process and amount with regard to CRA wage garnishments differs from all other creditors.
The CRA is unique in that they do not need a court order to garnish you. They can garnish up to 50% of your employment earnings, and up to 100% of your other earnings, like contract income or your pension, simply by sending notice to your employer. Where other creditors are concerned, they must file a claim against you and win a judgment to take enforcement action, and typically only take 20% of your earnings.
In either case, if a creditor is garnishing or threatening to have your wages garnished, it is because you have a debt you have not yet, or cannot, pay. To see the garnishment removed you will have to offer some form of arrangement that is satisfactory to your creditor. If they are already getting monthly installments from you on a garnishment – why would they want to accept a voluntary arrangement? Usually the only solution is to pay the debt in full.
Don’t have the ready cash on hand to do so? Perhaps look at your home equity and investments to see if you have anything you could use to obtain financing to pay the debt. If you don’t, a bankruptcy or consumer proposal may be on the table.
There are programs that you can participate in that will stop a wage garnishment, provide you with a single monthly payment on all your debts that you can afford, and stop interest, but the right solution depends on your income, income type, family composition, total debts, and more.
At DebtCare, we can help you determine the best options to settle wage garnishment issues.
Call us today at 1 (888) 890-0888.