Facing wage garnishment is a stressful and overwhelming experience, adding strain and uncertainty to your already difficult financial situation. In Canada, creditors have the legal authority to garnish wages to recover unpaid debts. This means a set amount of money will be taken out of your paycheque and given to creditors each payday.
If you’re currently dealing with wage garnishment, it’s important to know that there are legal avenues available to help you regain control of your finances.
This article will explore the steps you can take to stop wage garnishment once it has started. Whether you’re seeking immediate relief or looking to better understand your rights, this comprehensive guide is designed to help you navigate the complexities of wage garnishment in Canada.
How to Stop Wage Garnishment After It Starts
Stopping wage garnishment requires you to either repay the debt or file a legal proceeding to have the debts dealt with, such as a consumer proposal or bankruptcy.
- If you repay your debts completely, your creditors will stop garnishing your wages. However, this is easier said than done. If your creditors have turned to wage garnishment, you likely already lacked the funds to repay the debts in the first place. One way you can repay the debts anyway is through loans, however, taking on more debt to repay another debt only leads you into an endless cycle of debt.
- A consumer proposal allows you to pay off a portion of your debt balance while the reminder is forgiven. Once you file the proposal, creditors will no longer be able to garnish your wages. Learn more about consumer proposals.
- Bankruptcy will remove the entirety of your debt, meaning you will no longer need to repay your debts, and wage garnishment is no longer needed. However, you’ll lose various assets in the bankruptcy process. A trustee in bankruptcy will distribute your surrendered assets to creditors for your unpaid debts.
Alternatively, you can try negotiating with your creditors for a repayment plan that works for you. However, how willing the creditors will be to accept new terms varies. Some creditors might be unwilling to budge. There’s no guarantee that negotiations will put a stop to wage garnishment.
How a Consumer Proposal Stops Wage Garnishment
A consumer proposal gives you legal protection against creditors looking to collect through what is called a “stay of proceedings”. During this, creditors are ordered to stop any and all collection actions, including wage garnishments. The stay of proceedings is enacted as soon as your consumer proposal is filed.
That being said, if you break any of the terms in your consumer proposal, your consumer proposal will automatically be voided. Once voided, wage garnishment, collection calls, and any other new or outstanding collection actions can resume. That’s why it’s important to file a consumer proposal only if you know you can follow the repayment terms.
How to File a Consumer Proposal in Canada
Before filing a consumer proposal, it’s important that you’re aware of your options and their implications on your current situation. Though it may seem straightforward, co-signed debts, secured debts, and business debts can make your debt repayment situation incredibly complicated.
Reach Out to 4 Pillars Debt Advocates!
Before doing anything else, reach out to 4 Pillars for more insight into your financial situation and options available to you. We take a consumer-first approach to debt repayment, which means we have no obligations to or partnerships with creditors.
We understand that debt repayment is more difficult than just paying off debts. Dealing with debt takes a serious toll on our mental health, and it’s exacerbated by misinformed money habits that put us deeper and deeper into a debt hole. We want to use our empathy and expertise to eliminate the shame you feel and make you more confident in your financial decision-making.
We’re not just here to help you get rid of debt, we’re here to help you stay out of debt for good with compassionate support and financial literacy programs.
If you’ve ever experienced financial hopelessness, give us one chance to give you hope!
