Stopping Wage Garnishment in Red Deer – Legal Remedies You Should Know
Stopping a wage garnishment in Red Deer is a lot more difficult than preventing one in the first place. If you are being threatened, you might be able to use a credit-counseling agency or one of those debt solution companies that advertise on television all the time. They can sometimes work out an arrangement with your creditors that will stop the threat. However, once the garnishment is in place, there is little they can do to help you.
Some credit counselors have working relationships with creditors that enable them to intervene on your behalf to stop the garnishment, if you can come up with the full amount owed. In most cases, once a garnishment is in effect you will need a legal solution to stop it.
Here are three legal remedies for stopping wage garnishment in Red Deer:
1. Orderly Payment of Debts (OPD)
2. Consumer Proposal
3. Personal Bankruptcy
These solutions are outlined in the Bankruptcy and Insolvency Act (BIA) of Canada. They involve addressing all your outstanding unsecured debt, not just the account where the garnishment order is in force. All three of these remedies involve legally binding court orders so they will not only stop a garnishment currently in place against you, they will also prevent any future garnishments.
The first option is an Orderly Payment of Debts (OPD) and is only available in the Provinces of Alberta, Saskatchewan, Prince Edward Island, and Nova Scotia. A government approved non-profit credit counselor will work with you to determine whether you can repay your entire unsecured debt over 4 years with an affordable single monthly payment at the reduced interest rate of 5%. If you qualify, the court issues a Consolidation Order stopping any wage garnishments in place and protecting you from any creditor collection activity in the future.
Licensed bankruptcy trustees handle consumer proposals and bankruptcy filings. While both will stop wage garnishments in place and provide protection against future collection attempts, a consumer proposal is a better option for many Canadians.
A personal bankruptcy has both short-term and long-term consequences that are more severe than a consumer proposal. First, in bankruptcy, filers with substantial income and assets stand to lose some of both. Consumer proposals, while more costly than bankruptcy, allow those who qualify to keep all their assets. In the long term, once you have declared bankruptcy you will never be totally free of that blemish. It is true that the bankruptcy notation will drop off your credit rating 6 years after you are discharged, but you must disclose the fact you declared on any future information requests where the question is asked. If a job application asks whether you have declared bankruptcy 15 years after the fact, you must answer yes.
With a consumer proposal, you make a deal with your creditors to repay less than the total you owe. The trustee will work with you to determine a monthly payment you can afford to make over a maximum of 5 years and negotiate reductions in the principal amount you owe to match the total you can pay in that period. If you owe too much to qualify for an OPD and you have assets to protect, a consumer proposal may be the best means of stopping wage garnishment in Red Deer.
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