HOW IS GARNISHMENT DEFINED?
Garnishment is a legal procedure that a creditor can take after the court grants a judgment against you.
The creditor must first go to court and establish that a debt is owing.
If they establish that a debt is owing, the creditor gets a judgment against you as the debtor. And then, the court issues a summons.
The summons allows the creditor to take your assets to satisfy the debt. Each province has specific rules on which assets a creditor can seize to satisfy a debt.
The creditor can take your assets (if not exempt) and can request a garnishment from the court to permit them to take the money owed (“garnishee”) from many sources. These include your paycheck, bank account, or money owed to you by others (for example, your accounts receivable if you are self-employed).
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WHAT IS WAGE GARNISHMENT?
If your employer receives a garnishee summons, your employer has a legal obligation to pay a portion of your wages to the court. These wages are, in turn, paid to the creditor until you pay your debt completely.
Here are some crucial points to be aware of:
- There is a limit to how much of your wages can be taken. See the next section for a discussion of the minimum and maximum exemptions.
- Your employer is not allowed to dismiss you because your wages are being garnished.
Note: a creditor cannot garnish your wages without a court order unless the creditor is a credit union or the Canada Revenue Agency (“CRA”).
In addition to there being no requirement for a court order for garnishment to pay taxes owed to the CRA, a garnishee summons isn’t necessary for student loans or child support. However, a child support order is necessary for the provincial maintenance enforcement program to garnish your wages.
