wage garnishment « Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

if they repo my car can they garnishee my wages

Tuesday, July 5th, 2011

Question: I am 2 payments behind and trying to make arrangements but they are threatening to repossess the vehicle and then garnishee my wages… What can i do and can they do this? I told them i will get caught up within 6 weeks but they don’t care.

Answer: If you are behind on your payments on a car loan or lease, the lender does have the legal ability to repossess the vehicle, and sell it to recover the amount owing. If there remains a balance owing after they have sold the vehicle, they can take you to court and sue you, and potentially garnishee your wages.

While legally they can repossess the car and garnishee your wages, practically that is generally a last resort. The car lender doesn’t want to go through all of the hassle of seizing your car, selling it, and then suing you. They just want their money. You have the following choices:

First, talk to the lender, and make payment arrangements. Obviously they want all of their money now, and they will use the threat of seizing your vehicle to make you pay, but they don’t really want to take your car. They are making threats because you haven’t paid, so offer to make a payment when you get your next paycheque, and propose a plan where you will get caught up over the next month or two. If you have the ability to make extra payments and get caught up, they will probably allow you to do so.

Second, if the lender refuses to take your money, or if you don’t have the ability to get caught up, you will probably lose your vehicle, so you could consider voluntarily surrendering it to them.

If they do take the vehicle and pursue you for the shortfall, you have a few choices:

Pay them, or work out payment arrangements
File a consumer proposal or
File bankruptcy in Ontario

Filing a proposal or bankruptcy immediately stops a garnishment, but obviously it’s better if you can work out a plan with them first to avoid having to file.

Tags: car, garnishee
Posted in bankruptcy Ontario, consumer proposal, wage garnishment | No Comments »

Bankruptcy fees in Ontario – What If I Can’t Afford to Go Bankrupt?

Tuesday, April 5th, 2011

Question: What happens if one cannot pay the Ontario bankruptcy fees charged by the trustee? $200/month for 9 months will mean we don’t eat or have heat or some other necessity. What happens then?

Answer: All trustee firms in Ontario are private companies, so they require a contribution from you to cover the costs of administering your bankruptcy. In addition, the trustee must incur costs to mail the documents to your creditors, and to complete other duties.

However, all trustees will work with you to come up with a payment arrangement that works for you. Here are some things to consider:

First, what are you currently paying to service your debts? Once you file bankruptcy in Ontario you are no longer making payments on your unsecured debts, so in most cases the cost of bankruptcy is much less than what you are currently paying.

Second, the reason most people file for bankruptcy is to prevent their wages from being garnisheed. If you are not currently working, you have no wages to garnishee, so it may not be necessary for you to file bankruptcy at this time.

Third, your Ontario bankruptcy trustee will explain all of your options, so it may not be necessary to file bankruptcy.

Tags: cost of bankruptcy
Posted in bankruptcy, wage garnishment | 1 Comment »

Garnashee: How to Stop if Car Repossessed

Tuesday, February 15th, 2011

Question: I went bankrupt in 2009 now I messed up again I bought a SUV and the financial interest is very high, my wife was working at the time but now she got injured and it is just a matter of time before WSIB kicks in. But it has been really hard to keep up with only one income. We got behind our bills, I know I make $3,000 but I pay $1,200 in rent, 250 in utilities, telephone and cable around 100 insurance 200 a SUV payment of almost $500 a month, which leaves us with about 700 a month now that my wife is unable to work due to an injury. So my question is this, we are behind in our vehicle payment and they are going to come and get it because we cannot get caught up at this time, this will leave us with no vehicle for me to go to work, and in time they will ganashee my wages, what can I do, we needed a vehicle and because of my bankruptcy i pay high in finance charges and my wife was working so it was not a problem. We have no other dept….now we need to try to find a really cheap car for me to go to work, but in time they will garnashee my wages what can I do I know I can’t go bankrupt again but I won’t be able to survive if they do that.

Please help us figure out what to do

thanks

Answer: You have four choices to stop a wage garnishment.

First, you could talk to the finance company and see if they will allow you to defer one or two payments, with the promise that you’ll get caught up once your income recovers. They may agree to defer one or two payments to the end of your term.

Second, if they don’t agree to that, you can attempt to delay them from repossessing your vehicle by making partial payments each month, in whatever amount you can afford. You may be able to delay long enough to get caught up, since the finance company doesn’t really want your vehicle.

Third, if they do repossess your vehicle, they will not immediately start garnisheeing your wages. They will first contact you to attempt to work out a payment plan. At that point you may be able to make payment arrangements with them.

If all else fails and they do start a garnishment of your wages, you could either let the garnishment continue until finished, or you could file a second bankruptcy, or a consumer proposal.

Tags: garnishee, garnishment
Posted in bankruptcy, consumer proposal, wage garnishment | No Comments »

Bonuses and commissions and wage garnishment

Tuesday, January 11th, 2011

Question: How are bonuses or commissions dealt with if your wages are being garnished? Are they subject to a large percentage than regular wages? (20% of gross wages after required deductions).

Answer: Under the Ontario Wages Act a normal creditor (not the government or child support) can garnishee up to 20% of your gross wages. Generally bonuses and commissions are treated the same.

If you have a garnishment against you, or expect that your wages may be garnisheed, please see this article on how to stop a wage garnishment for more information.

Tags: commissions, wage garnishment
Posted in options, wage garnishment | No Comments »

Can CPP be garnisheed in Ontario?

Monday, November 22nd, 2010

Question: Can Canada Pension or Old Age Security payments be garnished?

Answer: Under the Ontario Wages Act only wages can be garnisheed. The only exception would be if you owe money to the government, such as the Canada Revenue Agency, they can garnishee a CPP or OAS payment.

One option would be to simply open a new bank account at a new bank, and deposit your CPP and OAS payments there; since your other creditors do not know about that bank account, they cannot automatically take money out of it.

Another option would be to file a consumer proposal or bankruptcy to officially eliminate your debt. However, you are then making payments towards your debt to protect yourself from creditors who may not have any legal recourse against you, so you should consult a licensed Ontario bankruptcy trustee to determine if that approach is in your best interests.

Tags: CPP, garnishee, OAS
Posted in bankruptcy Ontario, bankruptcy trustee, consumer proposal, Ontario bankruptcy trustee, options, wage garnishment | No Comments »

Wage garnishee

Sunday, September 13th, 2009

Question: My question is if my wage is being garnished by a company is the juice still rolling? Meaning can they be tacking on “interest or keep increasing the amount owed so i owe $9,500 and they take $ 200 off my cheques (biweekly) a month and now i still owe $9,320 becuase $20 was tacked onto the amount owed?

Answer: The short answer is yes, since you owe the money, the creditor can continue to add interest to the amount you owe until it’s paid.

If you are being garnisheed for $9,500, it may be prudent to review your options for how to stop a wage garnishment.

Posted in wage garnishment | No Comments »

I am making payments, but still being threatened

Tuesday, August 4th, 2009

Question: Hi There,

Due to my own error, I am currently in collections. I am being threatened with wage garnishee. They have not taken me to court as of yet; however, I am being harassed daily.

What action can the collections agency take when I am making consistent payments? I am paying what I can afford of $150/month. My outstanding debt is just over $5300.

I’ve been advised that they can’t do anything as long as I am making payments; however the harassment is making wonder.

Thank you for your help.

Answer: Legally, if you owe money, the collection agency can call you, even if you are making payments. Practically, if you are making payments, it is unlikely that they will take you to court, sue you, and attempt to garnishee your wages. They know that as soon as they take you to court you will stop paying them, and if they do get a wage garnishment you may then have no choice but to file bankruptcy in Ontario, and then they may get nothing.

If this is your only debt, and if you want to avoid bankruptcy, continuing to pay them is probably your best option. However, if you have other debts, or if you are tired of the harassment, it may be time to speak to an Ontario bankruptcy trustee about your other options.

Posted in bankruptcy Ontario, wage garnishment | No Comments »

Wage garnishment in Ontario

Tuesday, May 12th, 2009

Question: I’ve been negotiating with my collectors with some success except one. I have a small unsecured debt with a retail chain. I tried to negotiate with them and make payments but they refused and said they had to go ahead and garnish my wages.
In anger, I stupidly made the comment go ahead, I can’t do anything else.

Will they go ahead with this wage garnishment? The last thing I want is my employer to know I’m in trouble.

Answer: Probably not, but they might. It costs money for a creditor to go to court, sue you, and obtain a wage garnishment. In most cases if the amount is small they won’t bother.

However, if you don’t pay, a creditor can take you to court and attempt to garnishee your wages. If they do, you are left with three choices:

1. let the garnishment continue until they have been repaid in full (including legal costs)

2. file a consumer proposal; or

3. file bankruptcy in Ontario.

It’s up to you to decide which option is best for you. For more information, read this article on How to Stop a Wage Garnishment?

Posted in bankruptcy Ontario, consumer proposal, wage garnishment | No Comments »

Voluntary Assignment of Wages and Wage Garnishment

Monday, November 17th, 2008

Question: What is the maximum a person can be garnished? Can an employer take the full amount of my last cheque if I leave before the garnishment is complete?

Answer: Under the Ontario Wages Act, the maximum wage garnishment in Ontario is 50% of your wages. The only exception would be where the government can take 100% of the compensation received by a self-employed contractor. If you are an employee, your employer cannot take all of your last paycheque to satisfy a garnishment, unless there is a specific court order allowing a 100% garnishment.

For more information, consult this article on How to Stop a Wage Garnishment.

Posted in wage garnishment | No Comments »

Wage Garnishment

Monday, October 27th, 2008

Question: Is there any way to find out if there is a court order for a wage garnishment before your employer actually receives the garnishment order?

Answer: There is no guarantee that you can find out about a wage garnishment before it starts. You could go to your local court and ask the clerk if there are any judgments registered against you, but if the court action was in a different court it may not show up. You could also do a credit check through Equifax to see if there are any registered legal items. Your final option is to simply talk to your payroll person at work and ask them to inform you immediately if they receive any garnishment papers.

Posted in wage garnishment | No Comments »

Archive for the ‘wage garnishment’ Category