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.