Garnishments in Toronto – How much are they allowed to take?

It’s enough to make anyone’s heart stop – you get your paycheque, and you find that not only is the government taxing your income, but now your credit card company is taking a chunk through wage garnishment.  This can be an awful surprise, considering that the garnishments are generally 20% to 30% of your take home pay, an unexpected expense for your already tight budget.

Your first thought is, how can they do that?

Wage garnishment is legal action against you by your creditors to get the money you owe them.  It is legally binding for you and your employer to comply with the court order that justifies this legal action.

Essentially, your creditor has to file paperwork with the court in order to take action against you to recoup the money you owe them, which would be through wage garnishment. If the court agrees to this action, the court will then inform your employer to start deducting money from your paycheque.

If your wages are being garnished by Revenue Canada, no paperwork has to be filed with the court – they have the power to speak directly to your employer to start the garnishment. This is called a Requirement to Pay and this type of wage garnishment can be as high as 50% to 100% or your wages.

Last week a man came in with this exact situation – he received his paycheque and noticed the new deductions off of his pay. He was confused because no one told him about the garnishments and was upset because he couldn’t afford these deductions. He wanted to know how to stop this from happening.

There are three ways to stop a wage garnishment – pay the deductions until they stop, or file a consumer proposal or for personal bankruptcy. Because proposals and bankruptcies are both legal processes, either will stop any wage garnishments.

A wage garnishment takes your debt situation out of your control and places it in the control of the courts and your creditors. To take back your situation, consider filing for either a consumer proposal or bankruptcy. With these solutions you can take control over your situation and begin to look forward to your healthy financial future.

For more information about wage garnishments or ways to stop them, contact me at 310-PLAN. You can also email me any questions you might have. Take control of your situation and get the peace of mind and fresh start that you deserve.
 

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