It is quite common for creditors to have a hard time pursuing loan repayment from borrowers in the Northwest Territories. This is especially true when the loan has no collateral. This means the money lent was not secured with a house, car or other valuable item. Creditors may not have any assets to seize if borrowers fail to repay the debt as agreed. If all collection methods fail, creditors usually turn to wage garnishment.
Creditors may only use wage garnishment if provincial government law determines that the borrower has the resources to pay the debts back but failed to do so. In addition, the debtor may have neglected their payment obligation to spend money on other things instead. However, all creditors require borrowers to have a bank account and a stable income. With this, the law allows creditors to pursue collection without giving the borrower the choice to make or refuse payment.
In Canada, the law defines the three parties involved in wage garnishment as the creditor, debtor and the garnishee. However, it is the court that mandates the collection and receives the funds.
The Garnishment Law in Canada
Canada has a federal wage garnishment law stipulated in Part 1 of The Court Order Enforcement Act. It allows the creditors to intercept and take wages from the debtor.
The money intercepted often comes from the debtor’s bank account or the wages that the debtor’s employer pays them. Either way, the law requires the bank or the employer to pay the money directly to the court. In this circumstance, the bank or the employer is the garnishee.
This garnishment law is applicable in all Canadian jurisdictions. However, the federal government gives these territories the authority to define garnishment amounts and exemption levels.
Northwest Territories Garnishment Law Exemptions
• NWT Exemptions Act 135 states that $300 of the debtor’s wages is exempt from the garnishment. In addition, the law further exempts the sum of $100 for each adult and $80 for each child partially or totally dependent on the debtor.
• NWT Exemptions Act 136 says that this rule is applicable for each calendar month when the wage is payable and a garnishee summons is in force.
• NWT Exemptions Act 137 states that this exemption does not apply in a few instances where a garnishee summons has been issued based on a judgment or order for alimony or maintenance payments.
• NWT Exemptions Act 138 includes employee salary garnishment exemptions to the extent of the debtor’s employer’s deductible amount under the Act of the Territories or the federal act.
• NWT Exemption Act 139 states that the Northwest Territories Supreme Court may reduce the statutory exemption if the debtor’s spouse or dependent is receiving remuneration. This rule also applies even if the dependent or their spouse is among the debtors.
The Northwest Territories Maintenance Order Enforcement Act
• NWT Territories Maintenance Order Enforcement Act 141 states that the Maintenance Enforcement Administrator must serve two copies of the notice of attachment or order to the employer of the maintenance debtor named in the order.
• NWT Territories Maintenance Enforcement Act 142 requires the employer to send, mail or deliver one copy of these documents to the debtor.
• NWT Territories Maintenance Enforcement Act 143 states that the employer must pay the money garnished to the Government of Northwest Territories until the amount shown on the order is paid back.
• NWT Territories Enforcement Act 144 states that the monthly exemption must not be less than $300 and an additional $80 for each dependent child in their custody.
• NWT Territories Enforcement Act 145 mandates that wage garnishment covered in the Maintenance Orders Enforcement Act has priority over other claims and attachments against the debtor’s wages.
Wage Garnishment Procedures in Northwest Territories
There are basically two forms of garnishment. One is pre-judgment that allows obligations, debts and liabilities but not wages that others owe to the debtor. With this, debtors are able to preserve their assets until the creditor gets a final judgment. The court keeps all assets collected from the debtor until the creditor wins the lawsuit, and the court decides against the debtor.
On the other hand, the post-judgment garnishment allows obligations, debts and liabilities including wages that others owe to the debtor to be intercepted and taken if the creditor wins the case or the court decides against the debtor.
The law protects a portion of the debtor’s wages up to 70 percent. However, this may be reduced to 50 percent if the creditor’s claim is due to child support payment or alimony.
In NWT, the law regarding wage garnishment can be confusing and highly technical. With this, it is best to hire an attorney who specializes in the field to get the most accurate legal advice to smoothen out the complicated wage garnishment procedure.
Important Facts about Wage Garnishment in Northwest Territories
• Garnishment can only be done with a court order.
• The garnished money should only be paid to the court and not directly to the creditor. The court will only transfer the funds or a portion of them when the court has ruled against the debtor.
• The garnishee must only garnish the debtor’s wages times when there is money owed and the garnishee has received the garnishing order.
Getting the Garnishing Order
In order for the creditor to obtain a garnishing order, they should first file a lawsuit against the debtor. They may request the court to issue a garnishing order that will enable them to take money from the debtor’s bank account. If the court grants the creditor’s request, they will order the debtor’s employer to pay the court a portion of the debtor’s wage.
However, the creditor must be able to establish a liquidated claim. This means they have to prove the exact amount that the debtor owes them. If the claim is made for personal injury or damages resulting from negligence, the court may not grant the garnishing order. The creditor has to establish the exact amount owed and let the court decide the garnishment.
The Garnishing Order
• The creditor gives the debtor’s employer the garnishing order within the payday week.
• A new garnishing order has to be issued every pay period.
• Some garnishing orders may intercept wages and assets for a long time if the debt is for child or spousal support under a court order. However, dependents may have to register with the Family Maintenance Enforcement Program.
• For debtors who are independent contractors, the creditor may serve the garnishing order to companies that the debtor has a contract with.
InfoAviator Publishing is a organization determined to help Canadian consumers understand wage garnishment laws that are currently residing in the communities of (but not limited to) Aklavik, Behchoko, Colville Lake, Deline, Dettah, First Nation, Enterprise, Fort Good Hope, Fort Liard, Fort McPherson, Fort Providence, Fort Resolution, Fort Simpson, Fort Smith, Gamèti, Hay River Reserve, Hay River, Inuvik, Jean Marie River, Kakisa, Lutselk’e, Nahanni Butte, Norman Wells, Paulatuk, Sachs Harbour, Trout Lake, Tsiigehtchic, Tuktoyaktuk, Tulita, Ulukhaktok, Wekweeti, Whatì, Wrigley, and Yellowknife, in Canada.