When a Creditor Wants to Take Money From Your Wages or Bank Account
|This information applies to British Columbia, Canada. Last reviewed for legal accuracy by Rachel Lammers, Morelli Chertkow LLP in July 2018.|
If you don’t repay a debt, the creditor might try accessing money owed to you by someone else. The legal process in play is called garnishment. Learn how it works.
What you should know
If a creditor tries to garnish your wages
If you don’t pay back a debt, the person you owe can try having a portion of your wages paid to them. This is called garnishing wages.
The garnishing process
There are several steps the person you owe (the creditor) must follow. To begin, they must bring a legal action against you for the debt. They must get a court judgment in that action to be able to garnish your wages.
As well, the creditor must apply for a garnishing order. This is a separate court order. It requires a third party who owes money to you (in this case, your employer) to make payments to the creditor.
If the garnishing order is made, the creditor serves that order on your employer. The employer must send a portion of your wages to the court registry.
The creditor then must apply to the court to have the money paid out to them.
Laws to protect you if your wages are garnished
If your wages are garnished, there’s a limit to how much of your wages a creditor can take. Usually, that limit is 30% of your net income.
However, if the creditor is claiming spousal or child support payments, they can take up to 50%.
A garnishing order applies only to wages payable within the next seven days. So if the creditor wants to tap into what you’re owed in the next pay period, they must apply for a new garnishing order. (There’s an exception for support payments.)
An employer isn’t allowed to dismiss or demote a worker just because the employer receives a garnishing order. If that happens to you, you should seek legal advice. There are options for free or low-cost legal advice.
Meanwhile, if having your wages garnished causes you serious financial hardship, you can apply to court for relief. We explain how shortly.
If a creditor tries to garnish your bank account
If you don’t pay a debt, a creditor may try to get funds from your bank account. This is called garnishing a bank account.
There’s no limit on how much money can be garnished from a bank account. All the money in the account — up to the amount of the judgment — can be taken.
And there’s a difference in the process as well.
This type of garnishment also starts with a creditor bringing a legal action against you to confirm the debt.
However, the creditor can seek a garnishing order for your bank account at the same time as they start the debt lawsuit against you. No court hearing is required, and no notice is owed to you. These types of garnishing orders often take debtors by surprise.
Money that’s garnished from a bank account doesn’t go directly to a creditor. It gets paid into court. The creditor can’t access it until they get a judgment against you for the debt.
Some types of benefits are protected
Any government benefits you receive cannot be garnished — except by some government agencies.
For example, income assistance received by a debtor cannot be garnished. But there’s an exception for the Family Maintenance Enforcement Program, in enforcing a court order for child and spousal support.
Work out the problem
There are steps you can take if a creditor gets a garnishing order against you.
Step 1. Apply to set aside the garnishing order
You can apply to court to set aside (or “release”) a garnishing order.
First, you’ll need to prepare a court form to start the application. Your material will need to explain why it’s “just in all the circumstances” to release the garnishing order. For example, you might argue that the order causes you serious financial hardship.
Step 2. File and serve the application
Next, you file the application in court, and serve it on the other party.
Step 3. Attend the court hearing
At your hearing, you explain to the judge why they should release the garnishing order.
We go into detail on these steps and provide links to the court forms involved. See our in-depth information on this topic.
Who can help
Consider reaching out to this agency for help with managing your money.
- Credit Counselling Society of BC
- A non-profit society that helps people better manage their money and debt.
- Call 1-888-527-8999
- Email: firstname.lastname@example.org
- Visit website
Getting legal advice can help you clarify how to proceed.
- Lawyer Referral Service
- Helps you connect with a lawyer for a complimentary 15-minute consult to see if you want to hire them.
- Call 1-800-663-1919
- Visit website
- Access Pro Bono's Free Legal Advice
- Volunteer lawyers provide 30 minutes of free legal advice to people with low or modest income.
- Call 1-877-762-6664
- Visit website
- People’s Law School
- See more options for free or low-cost legal help.
- Visit website
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