In some cases, creditors find it to be impossible to collect a debt through normal collections practices. If the loan or the debt owed has been collateralized, the creditors can seize the asset and sell it as payment for the debt. In cases when this is not a possibility, the creditors have to look to other ways to collect the money that is owed. Sometimes, this means that the debtors’ wages will be garnished.
Wage garnishment is a tactic that the court employs in cases when the debtors have the funds to repay at least a portion of the debt owed. Whatever the reason, these people are not fulfilling their obligations, and the court forces them to do so through wage garnishment. This arrangement works well for both parties because the creditors no longer have to put forth collections efforts, and the debtors cannot decide that they are going to spend their money on things other than their debts.
The Code of Civil Procedure
Under Quebec’s Code of Civil Procedure, the times when Canadians can garnish a person’s wages are thoroughly outlined.
The court may only garnish 30 percent of a person’s wages. Under the law, the 70 percent of the debtors’ wages that remain after garnishment must be given to the debtors. In the event that the debtors owe child support, the 70 percent owed to the debtors will be reduced to 50 percent. If the person in question is the sole support of a partner, a child or another relative, his or her wages will be protected in the amount of $180 a week and $30 a week for two dependents. The monies received by a clergy member will also be exempt.
When the court decides which funds are to be considered when figuring how much money can be garnished, it will need to exempt the following:
• The employee’s contributions to his or her pension
• Contributions toward insurance or social welfare funds
• The amount of money the employer pays for the employees’ room and board while on a business trip
• The passes the employees use to travel to their jobs
The Process of Wage Garnishment
In order to begin this process, the creditors must start with a court order, and the court will need to rule in the creditors’ favor in two different instances. The first thing the creditors will need to do is file a lawsuit against the debtors for the amount owed. A successful outcome will mean that the creditors win the lawsuit and are formally awarded the exact amount that they are owed. If the creditors cannot state the exact amount, the court will not be able to award the money through wage garnishment until they do.
After the first step has been completed, the creditors will need to file a petition with the court for wage garnishment, but this is an ongoing process. The first petition will apply to one pay period. In order to have their judgments completely paid in this manner, creditors need to renew the petition with the court every pay period for wage garnishment until the debt has been paid in full. This would be the reason that people do not pursue this avenue for collecting debts in large numbers because it requires so much effort on the creditors’ part. Generally, only creditors with especially large debts owed to them will seek to obtain their money in this way.
The Garnishors and the Garnishees
After the process is underway, the creditors become the garnishors, people who are entitled to some of the assets belonging to the debtors. The garnishee will be the person who owes the debtors money or other assets. When it is the case that the debtors’ wages are going to be garnished, the garnishee will be the debtors’ employers who will be responsible for paying the court rather than the garnishors. Wage garnishments have also been known to occur with alimony or payments for child support.
How Payments Will Be Collected
The Minister will collect payments from the garnishees in the following order:
1. Payment due the debtors as salary, wages or other compensation
2. The fees or advances due to the debtors for remuneration, fees or profits
3. The debtors’ pension or compensation payments
4. Any other amounts paid to the debtors
Alternative Ways of Making Payments
Quebec’s wage garnishment laws also allow for debtors to pay the Minister of Revenue in an Act to Facilitate the Payment of Support. In these cases, the debtors pay the Minister of Revenue directly so that the funds may be remitted to the creditors. The court may also allow the debtors to set up a trust that guarantees the creditors will receive what is owed. Debtors and creditors may also draw up an agreement with the court’s approval for payments to be made from debtor to creditor for a period of three months.
Determining the Amount to Be Garnished
The Minister will be the person who will decide how much money the garnishee is required to deduct from the debtors’ wages. This will be based on the guidelines outlined in the Code of Civil Procedure. If the debtors were behind on making their payments to their creditors, these late payments can be added to the amount under consideration.
If the Amount Garnished Is Too High
In some cases, the debtors believe that the wage garnishment would be unfair because it would amount to a significant financial hardship. If the 30 percent or 50 percent amount that is allowed to be garnished is too high, the debtors will be able to file a petition with the court to have this number lowered. The result may be that the debtors will be required to comply with a payment plan. The court can also refuse to enforce the wage garnishment. However, the creditors can fight these actions in court.
Filing a Dispute Note
Sometimes, garnishees do not believe that they owe any debts to the garnishors. They can go to the court and file a Dispute Note with the court registry, and it will be handled by the creditor. In the event that the creditors disagree and believe that the garnishees do owe the money, the court will intervene
The laws change periodically, and this information may not be up-to-date. In order to learn the most recent changes to these laws, contact a lawyer or your Canadian province or territory.
Office de la protection du consommateur
400 Jean-Lesage Boulevard, Suite 450
Quebec, Quebec G1K 8W4
Toll Free: 1-888-672-2556
InfoAviator Publishing is a organization determined to help Canadian consumers understand wage garnishment laws that are currently residing in the towns of (but not limited to) Montreal, Québec, Laval, Gatineau, Longueuil, Sherbrooke, Saguenay, Lévis, Trois-Rivières, Terrebonne, Saint-Jean-sur-Richelieu, Repentigny, Brossard, Drummondville, Saint-Jérôme, Granby, Blainville, Saint-Hyacinthe, Shawinigan, Dollard-des-Ormeaux, Rimouski, Châteauguay, Saint-Eustache, Victoriaville, Mascouche, Mirabel, Rouyn-Noranda, Boucherville, Salaberry-de-Valleyfield, Sorel-Tracy, Vaudreuil-Dorion, Côte Saint-Luc, Saint-Georges, Alma, Pointe-Claire, Sainte-Julie, Boisbriand, Saint-Bruno-de-Montarville, Sainte-Thérèse, Thetford Mines, Sept-Îles, Chambly, Magog, Saint-Constant, La Prairie, Baie-Comeau, Saint-Lambert, Kirkland, and Varennes, in Canada.