Can a collection agency garnish my wages?

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In Canada, wage garnishment by collection agencies requires a court judgment to confirm a debt, but the Canada Revenue Agency (CRA) can garnish wages for tax debts without one. Provincial laws govern rules and exemptions, limiting how much can be taken. Navigating this may require professional help. Reach out via phone, text, or live chat if you have any questions. Not all trustees can be trusted.

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Collection Agency Garnish Wages Question

Can a collection agency garnish my wages? Is it possible for a collection agency to take money directly from my paycheck?

From: Anonymous Question
Location: Markham, Ontario (ON)
Category: debt management plan

Collection Agency Garnish Wages Answer

In Canada, it’s possible for collection agencies to garnish your wages, but they can’t just do it on a whim. They usually have to jump through some legal hoops first. This means filing a lawsuit, getting a court judgment that confirms the debt, and then applying for a garnishment order. But here’s a twist: the Canada Revenue Agency (CRA) is in a league of its own. They can garnish your wages for tax debts without needing to wave a court order in your face. For everyone else, the rules and how much they can take from your paycheck are decided by provincial laws, and there are some sweet exemptions that can save a chunk of your income from being snatched away.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, a collection agency can garnish your wages, but specific legal processes must be followed. According to the Bankruptcy and Insolvency Act (RSC 1985, c. B-3), particularly section 68, a creditor can apply to the court for a garnishee order to seize part of your wages directly from your employer. This means that while collection agencies cannot unilaterally take money from your paycheck, they can seek court permission to do so. For more information about your rights and the processes involved, you can refer to the section on debt collectors.

From: OSB Helper

Related Questions to Collection Agency Garnishing My Wages

Here are the top 5 most frequently asked questions related to the topic of wage garnishment by collection agencies, formatted in markdown:

1. Can a collection agency garnish my wages?

Yes, a collection agency can garnish your wages if they obtain a court judgment and a garnishment order.

2. How does a collection agency garnish wages?

A collection agency must file a lawsuit, obtain a court judgment, and then apply for a garnishment order to garnish wages.

3. How long does it take for a collection agency to garnish wages?

The process typically takes 3-6 months from the time the creditor takes legal action to the issuance of a garnishment order.

4. What percentage of my wages can be garnished?

In Ontario, creditors can garnish up to 20% of your net wages, though this percentage can vary by province.

5. How can I stop a wage garnishment?

You can stop a wage garnishment by paying the debt in full, filing a consumer proposal or personal bankruptcy, or negotiating a payment arrangement with the creditor[1][3][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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