In New Brunswick, a creditor who is unable to collect debts usually resorts to wage garnishment. Canada wage garnishment laws cover the procedures to be followed, when garnishment is applied and how to recover debts. All creditors have to go through this process to be able to recover debts through garnishment.
Generally, wage garnishment may only be done with a court order. In New Brunswick and other Canadian territories, there are creditors authorized to garnish wages even without a court order. This includes some labor unions and those who owe taxes to the Canada Revenue Agency. Creditors from these organizations need not go through the lengthy and tedious process to get a court order.
Canada’s wage garnishment law protects both creditors and debtors. The following are specific rules imposed in New Brunswick.
• New Brunswick Garnishee Act 52 and 53 states that the court administrator may direct the income source to pay the court without prior notice to the debtor.
• New Brunswick Garnishee Act 51 also allows the creditor to request such an order.
• New Brunswick Garnishee Act 50 states that when debtors fail to comply with all the requirements within the period given, the court administrator may issue a payment order directly to the income source to pay the court the specified amount.
• New Brunswick Garnishee Act 49 requires the person who is subject to the order to provide the court with the required information within 14 days. In addition, they must arrange for an income source to pay the money directly to the court.
• New Brunswick Garnishee Act 48 defines the income source as an individual, corporation or other entities that owe money to a person against whom a support order has been made. This includes the salary or wages, bonuses, commissions, piece-work, disability or sickness benefits, retirement and pension payments and annuities.
• New Brunswick Family Services Act 47 covers the system of support payment by income sources and automatic deductions where support orders are filed with a court administrator. All support orders are automatically deducted as soon as they are made unless the person who will benefit from the order tells the court not to.
• New Brunswick’s Garnishment Acts 45 and 46 say that wages that come from personal labour and services on hiring are exempt from garnishment.
There are many situations when debtors face wage garnishment. For instance, a credit card company may file a suit against a debtor. The creditor will intercept the debtor’s wages and pay them to the court. The court will give the credit card company the garnished money if they win the case against the debtor.
Another example is when a person has court order to provide financial support or maintenance to an ex-spouse or children. If that person fails to comply with the payment ordered, the dependents may file for a garnishment order to a have the funds directly taken from their bank accounts.
Generally, garnishing orders are given to banks or employers that hold the debtor’s funds.
Securing a Garnishing Order
The procedure starts with a creditor filing a suit against the debtor. The creditor will then request a garnishing order that will take the money out of the debtor’s bank account or wages. If the court favors the creditor, then the garnishing order will be served to the debtor’s employer or bank. The garnished money goes to the court until they decide who wins the case.
In some instance, the creditor has to establish a liquidated claim. The court may not grant the request for a garnishment order if the creditors fail to do so. Liquidated claims equate to the sum that the debtor owes. This can be difficult to establish in cases of claims for damages that come as a result of an accident. Once a precise amount is presented, the court may issue a garnishing order.
It is important that both the debtor and the creditor understand that the garnishing order has the following characteristics.
• It can only be made by court order.
• It requires money to be paid directly to the court and not the creditor. The money garnished may only be transferred to the creditor after a judgment.
• Garnishing orders should only be served to the garnishee at a time when there is money owed to the debtor.
• A garnishing order is not only served once. It must be reissued every salary period until the debtor satisfies the amount owed.
• A garnishing order may be served only once to collect for a long-term debt. However, this is only applicable to child or spousal support provided the dependents register with the Family Maintenance Enforcement Program.
What to Do if a Garnishing Order Causes Hardships
The employer has no right to fire or take disciplinary action against an employee for having a garnishing order on his or her salary. The law also protects the debtor from financial hardships with a rule saying that only 30 to 50 percent of their salary may be intercepted. If the debtor encounters difficulties meeting all these obligations, the New Brunswick wage garnishing law allows them to request a reduced garnishment amount. It may require them to make an appointment and have a hearing with the registrar where the order was issued.
However, the debtor must also understand that the law allows the creditor to request a garnishment increase. Nevertheless, the court will decide according to the debtor’s financial situation. Alternatively, the debtor may apply to pay by installment. Depending on the court’s judgment, the debtor may end up paying monthly dues in an amount that the court thinks is manageable.
The creditor and the judge may ask debtors some questions to prove their incapacity to pay. Debtors who are in a real financial crisis may be spared from paying for a period of time until they are able to do so.
Meanwhile, people who get a garnishing order must do the following.
• Do not disregard the garnishing order as it is a court order.
• Ignoring the order may end up paying twice to the court and the creditor.
• Pay the amount ordered directly to the court.
• The amount paid to the court does not have to be paid to the person whom the garnishee owes money to.
• Submit a dispute if the garnishee believes they do not owe any money to the debtor in question.
The garnishment law in New Brunswick can be complicated for the creditor, debtor and the garnishee. It is important to seek professional advice if there are any questions about the legalities of wage garnishment.
InfoAviator Publishing is a organization determined to help Canadian consumers understand wage garnishment laws that are currently residing in the cities of (but not limited to) Bathurst, Campbellton, Dieppe, Edmundston, Fredericton, Miramichi, Moncton, and Saint John, in Canada.