If you are constantly ignoring collection calls or letters, there may be consequences. Not paying your debts means your creditors can take your case to court to obtain a wage garnishment order. This court order can force your employer to send up to 30% of your wages to your creditors in order to repay the debt you owe.
In British Columbia, there are laws and rules about garnishing wages that are meant to keep the rights of creditors and borrowers in balance. A debt collection agency facilitates this process on behalf of creditors. This article explains British Columbia’s wage garnishment rules in detail, including the legal framework, procedures, limits, and possible consequences.
What Is Wage Garnishment?
Wage garnishment is a formal process that is a big part of getting rid of debt and collecting on it. In British Columbia, the rules about wage garnishment try to find a middle ground between the rights of creditors to get back money they are due and the rights of debtors to live a basic life. Both debtors and creditors need to know the rules, limits, and exceptions for pay garnishment to make sure everyone is treated fairly and the law is followed.
Wage Garnishment Process
Here’s an overview of the wage garnishment process in British Columbia:
- Creditor’s legal action: Before wage garnishment can occur, the creditor must obtain a court judgment against the debtor for the outstanding debt.
- Notice to debtor: Once the court judgment is obtained, the debtor will receive a notice outlining the intention to garnish wages. This notice provides the debtor with an opportunity to challenge the garnishment.
- Employer involvement: The debtor’s employer is served with a notice of wage garnishment. The employer is legally obligated to withhold a portion of the debtor’s wages as directed by the court order and remit it to the appropriate authority.
- Garnishment amount: The amount that can be garnished varies based on provincial laws and the debtor’s income. In British Columbia, the maximum amount that can be garnished is 30% of the debtor’s net pay.
- Ongoing garnishment: Garnishment continues until the debt is fully satisfied or until the court orders otherwise.
Structure of the law for wage garnishment
In British Columbia, the Court Order Enforcement Act and the Wage Earner Protection Program Act are the main laws that say how to take wages. These acts set up the legal framework for creditors who want to use wage garnishment to follow court orders and collect unpaid debts.
Garnishing Employee Wages
Before a creditor can take steps to garnish a debtor’s wages, they must first win a court case against you. This ruling says that the debt is real and gives the creditor permission to take steps to get the money back. Once the creditor has the ruling, they can ask for a garnishment order.
The garnishment order is given to the debtor’s workplace, who then sends the court-ordered percentage of the debtor’s wages to the creditor until the debt is paid off. The amount that can be taken from a debtor’s pay depends on things like the type of debt, the debtor’s finances, and the provincial laws in place.
Debt collection agencies
Debt collection agencies are hired by creditors to recover outstanding debts. These agencies operate within the legal framework and follow prescribed procedures. They typically work to negotiate repayment arrangements, inform debtors of their rights, and, in some cases, initiate legal action if other collection methods are unsuccessful.
In the context of wage garnishment, debt collection agencies may:
- Obtain court judgments: Debt collection agencies can initiate legal proceedings to obtain court judgments against debtors.
- Coordinate with employers: They work with the debtor’s employer to ensure that the wage garnishment order is properly executed.
- Monitor payments: Debt collection agencies may monitor the payments received from garnished wages and ensure that they are remitted to the creditor as required.
- Provide information: Debt collection agencies inform debtors about their rights and responsibilities during the garnishment process.
Rules About Limits and Exceptions
British Columbia has set limits and exceptions so that debtors don’t have to go through too much financial trouble because of pay garnishment. The province wants to make sure that you have enough money to cover basic living costs, so these limits are in line with that goal. The Court Order Enforcement Act sets the highest amount that can be taken from a debtor’s paycheque. This makes sure that you still have enough money for basic needs.
In British Columbia, wage garnishment usually doesn’t apply to social support, disability benefits, and pension payments. These exemptions are there to protect people who are vulnerable and keep them from getting into bad financial situations.
Wage Earner Protection Program (WEPP)
In British Columbia, the Wage Earner Protection Program Act gives workers who are due wages by their employers more protection. Through the WEPP, eligible workers may be able to get some of their unpaid wages and other benefits if their employer goes bankrupt or goes out of business.
Even if a company is having trouble paying its bills, the program protects employees’ basic right to be paid. This effort helps stop situations in which employees don’t get paid because their boss’s finances aren’t stable.
What Happens When Wages Are Taken?
Both borrowers and creditors can be hurt by wage garnishment indifferent ways. For people who are in debt, the instant effect is a drop in their take-home pay, which can make it hard to pay for living costs and keep up their standard of living. Financial stress and not being able to meet basic needs can hurt their general health and well-being, which can cause emotional and mental distress.
On the other hand, pay garnishment is a way for creditors to get back money they are owed. But the process can take a long time and cost a lot of money. To get a judgment and start garnishment, creditors have to go through legal steps and court processes. Also, creditors are limited by the law in how much they can garnish. This makes sure that borrowers have enough money to meet their basic needs.
How to Stop Wage Garnishment
The sole effective method to stop wage garnishment involves initiating a Consumer Proposal or personal Bankruptcy procedure through our Licensed Insolvency Trustee. This approach possesses the power to swiftly halt any ongoing garnishing order, regardless of its current stage within the legal proceedings. Thanks to the application of a federal law known as a “Stay of Proceedings,” you will experience instant relief from this garnishment.
Should you find yourself confronted with creditor-driven legal threats or wage garnishment, hindering your ability to manage other financial obligations, don’t hesitate to reach out to us at Allan Marshall & Associates. Our team is well-equipped to provide expert assistance and counselling.