Can collection agencies garnish your wages?

_{collection agencies garnish wages, collection agencies garnishing your wages, Ontario}

In Canada, collection agencies can garnish wages but usually need a court order, except for CRA, credit unions, and payday lenders with voluntary wage assignments. Collection agencies typically must sue and win a judgment first. Employers must comply, but there are limits. For example, Ontario caps it at 20% of gross wages. Know your rights, as limits vary by province! Reach out via phone, text, or live chat if you have any questions.

Show Table of Contents

_{Wage garnishment in Canada: know your rights and limits.}

Collection Agencies Garnish Wages Question

Can collection agencies garnish your wages? I’d like to know if collection agencies have the ability to garnish wages in Canada for unpaid debts.

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

Collection Agencies Garnish Wages Answer

In Canada, collection agencies can garnish wages to recover unpaid debts, but typically they need a court order to start the ball rolling. However, there are exceptions to this rule. The Canada Revenue Agency (CRA), credit unions, and payday lenders with voluntary wage assignments can garnish without a court order. Generally, a collection agency must first file a lawsuit and get a court judgment before garnishing can begin. Your employer is then obligated to comply with this order, but don’t worry—there are limits on how much can be garnished. For example, in Ontario, it’s up to 20% of your gross wages, while in Alberta, certain income is safeguarded. So, know your rights and be informed about these garnishment limits, which vary across provinces!

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, collection agencies can garnish your wages in Canada for unpaid debts, but they must obtain a court order to do so. This process is governed by the relevant provincial legislation and typically involves the following steps:

1. The creditor must file a claim against you in court and secure a judgment.
2. After obtaining the judgment, the creditor can apply for a garnishment order.
3. Once the garnishment order is issued by the court, the collection agency can instruct your employer to withhold a portion of your wages.

Specific regulations regarding the garnishment process can vary by province, but generally, Section 69 of the Bankruptcy and Insolvency Act outlines the procedures related to wage garnishment and creditor claims. Ensure to consult the applicable provincial law for further details regarding specific procedures and exemptions, or learn about personal bankruptcy as it may provide additional context.

From: OSB Helper

Related Questions to Collection Agencies Garnishing Your Wages

Here are the top 5 most frequently asked questions related to wage garnishment by collection agencies in Canada:

1. Can collection agencies garnish my wages?

Yes, collection agencies can garnish your wages after obtaining a court judgment.

2. How much of my wages can debt collectors garnish?

In Alberta, up to 50% of the amount between $800 and $2400 can be garnished, while in Ontario, up to 20% of gross wages can be garnished for regular debts[1][4].

3. How do collection agencies garnish my wages?

Collection agencies must first file a lawsuit and obtain a court judgment; then, they can use this judgment to garnish your wages or bank account[1][2].

4. Can bankruptcy stop a wage garnishment?

Yes, filing for bankruptcy or a consumer proposal can stop a wage garnishment due to the automatic stay of proceedings[2][4].

5. Who can garnish my wages without a court order?

The Canadian government, such as the Canada Revenue Agency, and certain financial institutions like banks and credit unions with voluntary wage assignments can garnish wages without a court order[1][4].

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

References

_{Table of article references}