Sometimes part of the reason why we lose control over our debt and finances has to do with education. It could be that we simply lack the understanding of how to spend money wisely, how to avoid high interest rates, and how to make best types of purchases with our money. No matter what the root cause is, however, troublesome debt and a loss of financial control can have serious consequences on our income and personal life when left unchecked.
In cases where a debtor has defaulted on their loans or hasn’t made any payments on debts, a creditor can seek a wage garnishment to reclaim the amount of unsecured debt they are owed. This situation can be difficult and leave someone feeling helpless and out of control of their finances, so it should be addressed immediately.
Legally, creditors are entitled to up to 50% of your gross wages, though a typical garnishment might be around 20%. Losing this amount of regular income can be truly debilitating to someone’s ability to keep up with bill payments and living expenses, so you should be swift with putting an end to the garnishment.
It takes quite a bit of effort from the creditor to secure a warrant for wage garnishment. Wage garnishment is a legal proceeding that requires legal action to stop it. Luckily, the process for how to stop your wages from being garnished is not complicated and with the help of a Licensed Insolvency Trustee, you can take the necessary steps to stop the process.
Three Ways to Stop Wage Garnishment
The three ways to stop a wage garnishment are as follows:
- Negotiate a repayment plan with your creditors
- Declare bankruptcy
- File a consumer proposal
In some cases, it’s possible to negotiate with your creditor and come up with an alternative deal that entices them enough to withdraw the garnishment, but if they do not agree to such terms, then you need to carry out a legal procedure.
Immediate Stop to Wage Garnishment
The moment someone facing a garnishment declares bankruptcy or files a consumer proposal, the wage garnishment is stopped. Since employers are obligated to comply with court-ordered wage garnishment, it requires a subsequent legal proceeding such as a bankruptcy or consumer proposal to authorize them to stop garnishing wages.
Bankruptcy Trustees Can Help
Now known as Licensed Insolvency Trustees, bankruptcy trustees are the only ones who can take the necessary legal steps to end your wage garnishment. Since a garnishment can be financially difficult and potentially detrimental to your relationship to your employer, you should seek out a trustee’s help as soon as you are faced with insolvency to avoid wage garnishment altogether.
Your employer cannot actually demote or terminate someone who is facing wage garnishment, so be aware of your rights during the process and stay focused on turning things around. Since debt relief in the form of bankruptcy and consumer proposals ultimately reduces the amount of debt someone owes, teaming up with a bankruptcy trustee will allow you to come up with a long-term plan for debt recovery and make strides toward your long-term financial goals.