How Can A Creditor Garnish My Wages And Does Bankruptcy Stop A Garnishment

Hello,

If a creditor wishes to garnish your wages for a debt owing, they must first make an application to the court to obtain a judgment. You would be served with a notice of this proceeding and have an opportunity to present your side of the situation. For example, perhaps you would argue that the amount owing is lower than what is being reported. Once the court has determined the amount owing, a judgment is issued and the creditor may use this judgment to garnish your wages and/or bank account. In some cases, a creditor may choose to register a caveat on your property if applicable.

There are a few situations in which a garnishment may occur without a judgment being issued by the court. For example, Canada Revenue Agency may garnishee wages without having to go through the court process that other unsecured creditors (e.g. credit card company) must follow. Another situation would be where an individual has given a creditor an assignment of wages.

Section 5 of Manitoba’s Garnishment Act states that 70% of wages are exempt from seizure or attachment under a garnishing order issued by the court. On this basis it would follow that approximately 30% of your wages can be garnished. There are some additional provisions to be considered depending on whether or not you have any dependants. In addition, there are some special considerations given with respect to maintenance and support orders.

In Bankruptcy there is a stay of proceedings in effect such that creditors cannot commence or continue their collection efforts.  As such bankruptcy does stop garnishments including those imposed by Canada Revenue Agency.  In certain cases, such as for child support, the garnishment may only stop temporarily.