Garnish wages for student loans in New Brunswick
I`ve been contacted by a collection agency for a CIBC student loan in 1997-98. They will not accept a payment plan and want me to open an account with CIBC and have my payroll cheque deposited there every two weeks. After this is done they `may` decide to talk about a payment plan but they would not say this is guaranteed. I`m afraid to do this as they may take my full cheque and I`m scared of that happening. Someone told me that in New Brunswick the only entity that can garnish your wages was Revenue Canada. Is this true? Or can the collection agency do it as well? They also mentioned that if they did proceed with the garnish I would lose 33% of my cheque every two weeks. Can they really take that much?
A sidenote here…I received a statement from them about a month ago saying that my debt was cleared and the balance owing was $0.00 but they claim it was a mistake and they would not honor the statement. Can this paper work for me?
Any help you can provide would be greatly appreciated. Thank you!
Posted from: New Brunswick
I can see why you would be concerned as the bank has the right of set-off, meaning they can absorb any deposits into the CIBC. This would not be considered a garnishment, and any of your creditors can go to court and get the ability to garnish. Although any creditor who does this is subject to provincial law that determines what percentage can be garnisheed. The difference here is if the money is in the same institution that the loan is at so they can simply set off as much of any deposit as they want, no maximum.
As for the paperwork, you can pay to get a legal opinion, but I doubt it is legally binding. People, including those who work at a bank are entitled to make mistakes and it sounds like they have.
If I were you I would open the account at CIBC. Put a portion of your cheque in there, but not all of it and then see if you can discuss payment arrangements.