Difference between revisions of "Garnishment and Set-offs"

Some private pension benefits and many types of government income benefits, such as welfare payments, are exempt from being seized by creditors. (For example, see [https://www.canlii.org/en/bc/laws/stat/sbc-2002-c-40/latest/sbc-2002-c-40.html#sec29_smooth section 29] of the ''Employment and Assistance Act''.) This means that a creditor cannot use a garnishing order to make the government or pension plan administrator pay the benefits, or any portion of them, to the creditor. Also, there is some case law indicating that such benefits may be exempt from garnishment or set-off even after they have been deposited in a bank account, especially if the purpose of the account is to receive the benefit. (See [http://canlii.ca/t/1vt5n ''Metropolitan Toronto (Municipality) v. O’Brien''] and ''McIntosh v. Laronde''.) However, this area of the law is not fully developed. Government can give itself a statutory right to set-off payment of some government benefits against debts owed to the government — one example being that the Canada Revenue Agency can take at least a portion of a person’s Canada Pension Plan benefits in payment of arrears of taxes.

To get a garnishing order against a bank account, a creditor must start a legal action in either Small Claims Court or Supreme Court (see the section on Court Processes in Consumer and Debt Matters). The garnishing order can be obtained without a court hearing and without notice to the debtor. The creditor files an affidavit and a draft order with the court registry. A registry official processes the draft order and gives the completed order to the creditor to serve on the third party and the debtor. The affidavit and order must follow a format set out in the schedules at the end of the [http://canlii.ca/t/84h5 ''Court Order Enforcement Act''].