Can Your Wages Be Garnished In Alberta?

If you live in Alberta and are struggling with debt, you may wonder whether wage garnishment is on the cards. Laws around wage garnishment can differ wildly across different regions and countries, so you must obtain as much information as possible to protect your rights. The following article looks at the practice of wage garnishment and what to expect if you are in this situation.

What is wage garnishment?

When you are in debt to one or more creditors, for whatever reason, a court may order a ruling that allows your employer to withhold a certain amount of your income. The court will withhold this amount and send it to the creditor to cover your debt repayment. This practice is known as wage garnishment and will continue until the debt gets repaid. Common reasons for wage garnishment include child support payments, consumer debts, and student loans. Still, a court order can get ruled for various reasons.

It’s important to note that there is a prescribed process a creditor must go through to invoke a wage garnishment ruling. They must go to court and establish the debt they owe and that they are responsible for the payment. When a garnishment gets ruled, the creditor may be permitted to take money from various sources, including your paycheck, bank account, or money owed to you by other parties.

Can your wages be garnished in Alberta?

The laws relating to wage garnishment are not universal, so those in debt should brush up on the specific rules and regulations for the area in which they reside. In Alberta, the garnishment rules are as follows:

You are entitled to keep the first $800 of your net income.
The person or party to whom you owe money may garnish up to 50% of your income between $800 and $2400. Plus, 100% of any net income over $2400.
If you have dependents, the exemption amount may increase according to the number of dependents you have.
The same rules do not apply if you are in debt to Canada Revenue Agency or owe child support or alimony payments.

What can you do to prevent wage garnishment?

When you work hard for your monthly paycheck, it can seem unfair to have it taken away from you. An employer is not legally entitled to dismiss you due to wage garnishment. Still, it could paint you in a negative light and indirectly impact your employment situation. Suppose you can take preventive steps to avoid this scenario in the first place. In that case, you may be able to repay your debts without court intervention.

You may prevent creditors from taking legal action if you manage your money effectively and meet your debt repayments where possible. There are also a variety of debt management plans designed to help those struggling. Talk to a Licensed Insolvency Trustee who can walk you through the options available.

If you have received a wage garnishment judgment, you should read through all the information to ensure it is accurate and fair. Check that the amount is correct and that you haven’t already paid the debt. You can challenge the garnishment if you believe it is in error.

Even if correct, it may be worth contacting your creditors to negotiate a different deal. They will appreciate the openness and transparency and may be amenable to an alternative payment plan.

Make sure you are completely open and honest with your employer as well. Approach them in advance to let them know of the situation. They cannot legally dismiss you for wage garnishment, but it can be uncomfortable to let them know. Nevertheless, honesty is always the best policy.

Assess the impact the wage garnishment will have on your current financial situation. If you foresee it causing hardship, you should consult a credit counsellor who will walk you through your debt relief options. These may include repayment plans, consumer proposals, or filing for bankruptcy.

If you are struggling with your debts or have received a wage garnishment ruling, help is available. Get in touch with Fox-Miles and Associates today to discuss your situation and receive a free consultation.