Help! I Have a Garnishee

What is a Garnishment & How did I Get One?

Garnishments may occur if you stop paying your creditor and the creditor decides to take legal action. To take action, a creditor must get a Garnishment Order from the Court to present to your employer or financial institution to make payments out of your income or bank account. You may have heard people say the term ‘garnished;’ however, the correct term is garnishee or garnishment. A Garnishment Order from the Court is not required by Canada Revenue Agency as they are able to issue a Requirement to Pay in its place.

How Much Will Get Garnisheed?

It is up to the judgement of the Court to decide if and how much of your wages or bank account will be garnisheed. In the case that a Requirement to Pay has been issued by the CRA, often 30% of income is garnisheed. However, in some extreme situations, 100% of income has been taken.

How Do I Get Rid of a Garnishment?

A garnishment is a legal proceeding that only can be stopped by paying the debt or by filling a Consumer Proposal or Personal Bankruptcy. Filing for personal bankruptcy or filling a Consumer Proposal acts as an automatic stay of proceedings pursuant to Section 69 of the Bankruptcy and Insolvency Act. This means that you are legally protected from the Garnishment Order and it must be removed from your wage or bank account. Once you have signed either for personal bankruptcy or a Consumer Proposal, your employer or financial institution will be notified and the garnishment must stop. This is also applicable to Requirements to Pay as a result of tax debt.

Will Filing for Insolvency Protect Me From All Garnishments?

While most garnishments are protected by the stay of proceedings after filling for insolvency, garnishments for child support and spousal support are not.

What Can I Do?

If you have been threatened with a garnishment order or your wages or bank account have been garnisheed, contact our office immediately to schedule your no cost initial consultation and assessment at one of our convenient locations in Campbell River, Courtenay, Powell River, Terrace or Gibsons. We will advise you on dealing with garnishments, and give you the options on how to move forward.
Derek L. Chase, CPA, CA, LIT
Derek L. Chase, CPA, CA, LIT

Being able to offer debt help assistance to individuals and corporations on a more intimate basis was a driving force in completing a “second CPA” by becoming licensed by the Federal Government as a Licensed Insolvency Trustee (previously Trustee in Bankruptcy) in 1997. It is extremely satisfying to be able to witness lives change for the positive due to a restructuring of financial affairs.

We remain open for business and are fully operational. Offices are open for appointments only, however we are available to serve you remotely. Please contact us to discuss your options during this challenging time.