When can a creditor garnish your wages
I am planning on going bankrupt but not for a few months. I have not paid my creditors for 2 months and it will probobly be another month before I officially file. When can a creditor garnish your wages? Do they have to tell you first or can they just go straight to your employers? Can they still do it if they know you are going bankrupt?
Posted from: British Columbia
A creditor can initiate the garnishee process any time there has been a default on the terms or conditions of the loan. What the creditors have to do to initiate this process is to issue a Statement of Claim (this is a legal document telling you that you are being sued, who you are being sued by, and why they are suing you).
The purpose behind this Statement of Claim is that the creditor must go to court to obtain a judgement, this is essentially the courts sanctioning of the debt and approving the creditor to take more aggressive forms of collection (i.e. a garnishee).
So as you can see it is a bit of a process. If you get served with a Statement of Claim my suggestion is at that point you may want to file the consumer proposal immediately otherwise you are at risk of having your wages garnisheed in the near future.