What is Wage Garnishment?

If you have stopped paying one or more of your bills, the creditor has the right to petition the court to “garnishee” part of your wages to be used to repay your debt. Basically, the creditor sues you for the debt and the court then allows the creditor to attach your wages. The amount is determined by the court and while in theory you should be left with enough on which to live; in practice this is not always the case.

If you’ve ignored the debt to the point of a wage garnishment being levied by the court, the creditor and the court may be unaware of how dire your financial situation may be. Once we get into financial trouble, many of us respond by ignoring the situation in the hopes that things might get better.

Wage garnishments can be extremely embarrassing, as they make your employer aware of your plight. While you cannot be fired for having your wages garnisheed, no one wants to experience the pain of being notified by someone within your workplace informing you of the court order to garnishee your paycheck. What can you do?

Doing nothing is not an option. If you have some faint hope your financial situation might improve in the coming months and you lean on that belief to continue to ignore your creditors, you’re asking for trouble. While it is possible to stop a wage garnishment once an order has been entered, you will have fewer options available than if you act immediately. Once entered, you can only stop a garnishment through a formal consumer proposal, or by declaring personal bankruptcy.

Both of these options require the services of a bankruptcy trustee, licensed by the Federal Government. Many people hear the phrase “bankruptcy trustee” and assume the worst possible outcome and wait till it is too late to do anything else before meeting with a trustee. You should know that bankruptcy trustees are highly trained professionals who are aware of all available debt solution alternatives – not just those for which their services are required. A trustee can help you assess your situation to see if credit counseling and a debt management plan would be suitable for you; heading off the creditors before wage garnishment can become an issue. An initial consultation is free, so you have nothing to lose by getting in touch with one.