Can debt collectors garnish your wages?

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In Canada, if you’re not paying a debt, debt collectors might try to garnish your wages. Generally, they need to go through court and you’ll have 21 days to respond. Miss that, and they could get a garnishment order to take from your paycheck. However, groups like the Canada Revenue Agency have the authority to garnish without court approval for certain debts. Reach out via phone, text, or live chat if you have any questions.

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Wage Garnish Question

Can debt collectors garnish your wages? I’d like to know if debt collectors can garnish wages in Canada. It’s important to understand my rights.

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

Wage Garnish Answer

In Canada, if you owe money that isn’t getting paid, debt collectors might be able to take a cut from your paycheck. Most of the time, they need to head to court first and file what’s called a Statement of Claim, so you’ll have a chance to argue your case within 21 days. If you miss that window, they could snag a garnishment order that lets them dip into your wages straight from your boss. Now, here’s the kicker: some creditors, like the Canada Revenue Agency and payday loan companies, have the power to swoop in and garnish without asking the court’s permission for specific types of debts.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, debt collectors can garnish your wages in Canada under certain conditions. Wage garnishment is typically a legal process initiated after a creditor has obtained a judgment against you. This is outlined in Canada’s Bankruptcy and Insolvency Act (BIA) and associated regulations, specifically in sections discussing creditor rights and enforcement mechanisms.

The process requires the creditor to apply to the court for a garnishment order. Once the order is granted, a portion of your wages may be deducted at source and paid directly to the creditor until the debt is settled. It is important to know your rights, as there are also specific exemptions and limits on how much can be garnished, detailed in local regulations and provincial laws.

From: OSB Helper

Related Questions to Debt Collectors

Here are the top 5 most frequently asked questions related to wage garnishment by debt collectors, based on common online searches and current trends:

1. Can debt collectors garnish my wages?

Yes, debt collectors can garnish your wages after obtaining a court order.

2. How much of my wages can be garnished?

The amount varies by province, but generally, it can range from 20% to 50% of your net income, depending on the province and the type of debt[2][4].

3. Who can garnish my wages?

Credit card companies, collection agencies, government agencies (including the Canada Revenue Agency), payday lenders, banks, and private lenders can garnish your wages[2][4].

4. How does a wage garnishment work?

A creditor must first file a lawsuit and obtain a judgment, then serve a garnishment order to your employer, who must comply unless a subsequent court order stops the garnishment[2][4].

5. How can I stop a wage garnishment?

You can stop a wage garnishment by filing for bankruptcy, making a consumer proposal, or reaching a debt settlement with the creditor through a Licensed Insolvency Trustee[1][4][5].

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

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