Wage garnishment is a legal procedure where a creditor collects payment from a debtor’s salary or bank account. The creditor may only secure a wage garnishment order in Nova Scotia after filing for a court order. If the judge decides in their favor, they will specify the amount to be garnished. The three parties involved are the creditor, debtor and the garnishee. The garnishee is typically the debtor’s employer or a bank where the debtor has an account. The creditor serves the order to the garnishee, and they have to pay the exact amount directly to the court. The money is taken from payables to the debtor such as their salary or bank deposits.
In Nova Scotia, having a wage garnishment order can be embarrassing. However, a debtor who works as an employee can be sure that their employers cannot dismiss or demote them because of this situation. In Canada, it is illegal for employers to do this.
The wage garnishment legislation in Nova Scotia protects all three parties as covered in Part 1 of The Court Order Enforcement Act. The following are the rules covered in the province’s law.
• Nova Scotia’s Maintenance Enforcement Act 29 says that the garnishment binds every income source that the director orders with or without its name stated in the order.
• Nova Scotia’s Maintenance Enforcement Act 28 allows the maintenance enforcement director to issue a garnishing order that requires one or more debtor’s income sources to withhold money owed to the debtor when the order is served.
• Nova Scotia’s Rules of Civil Procedure 26 requires employers to pay the court 15 percent of a debtor’s gross salary when they have a garnishment order. However, the wages must not fall below $315 per week for those who are supporting a family and $210 for a single debtor.
• Nova Scotia’s Maintenance Enforcement Act 30 states that income sources include individuals, corporations and other entities that owe the debtor the money for salaries, wages, remuneration, bonuses, commission, piece-work, allowances, disability, sickness or accident plan benefits, retirement or disability pensions, rental income, annuities, service fees and other sources of income as the regulation prescribes.
In Nova Scotia, there are two forms of garnishment.
• Pre-Judgment Garnishment
With pre-judgment garnishment, the law allows the creditor to attach debts, liabilities and obligations that other people owe to the debtor except wages before the court’s judgment against the debtor. It provides the opportunity for debtors to protect their assets until the court releases its final orders. All the money and property collected go straight to the court.
• Post-Judgment Garnishment
Post-judgment garnishment allows liabilities, debts, obligations and wages that others owe to the debtors to be intercepted following the creditors receipt of a garnishment order that the court issued. However, debtors can be sure that 70 percent of their wage is protected. On the other hand, only 50 percent is protected if the creditor is seeking child support payments or alimony.
The Garnishment Order
• The court is the only body that can issue a garnishment order.
• All garnished money is paid directly to the court.
• The garnishment order should only be served at the period when the garnishee owes the debtor money.
The creditor may only garnish an employed debtor’s wages once they obtain a garnishing order. They may also obtain the order if the debtor does not defend him or herself at trial. In addition, the garnishing order has to be served to the employer within the salary week.
If the debtor believes that he or she does not owe any money to the creditor, an effort must be made to prove the claim in court. If the debtor is not able to convince the court, they will need to pay the appropriate amount to the debtor.
Garnishment Order Termination
There are only three ways the debtor can terminate a wage garnishment order in Nova Scotia.
• Pay the whole debt to the creditor.
• File a consumer proposal as a means of negotiating an agreement with the creditor.
• File for bankruptcy.
If the garnishing order causes the debtor serious financial hardship, the law allows them to make an appeal to reduce the amount being garnished. They may also request to pay by installment or release the order. However, they need to participate in a hearing with the court registrar and prove their financial incapacity. The debtor may have to appear in front of a judge.
The court may either decide to allow the debtor to pay on a monthly installment basis or reduce the percentage. The debtor may have to prepare for questions that both the judge and creditor will raise. Debtors with severe financial difficulty may end up not having to pay anything for the time being.
Furthermore, this procedure does not cost anything. There are no court or administration fees to pay. Nevertheless, the law allows the creditor to demand an increase in the garnished percentage if they are able to prove that the debtor has sufficient resources.
Procedure to Follow for Garnishees
• Garnishees must not ignore the garnishing order.
• Failure to pay the amount that the court specifies leads garnishees to pay both the court and the creditor.
• Garnishees cannot fired employees for having a garnishing order.
• Garnishees do not have to pay the person that the debtor owes money to. Instead, they pay the court directly.
• Garnishees must contact the court registry that issued the order if they believe they do not owe the money to the person in question or the debtor. They must also submit a dispute note that explains the reasons why they do not owe the debtor any amount.
Being caught in a situation where one is forced to pay debts can be devastating. It can also be very embarrassing. This is especially true to those who are employed at a company. Although the employer does not have the right to fire the employee, it may leave a bad impression.
Nova Scotia residents who are in this situation should seek legal help in order to minimize the damaging effects of garnishing order. There are many lawyers in the province who specialize in the field and can educate debtors about their rights. They can also offer solutions that are suitable for the debtor’s financial state. Meanwhile, people who are facing debt problems and want to avoid wage garnishment should get debt management counseling now.
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) Annapolis Royal, Lockeport, Mulgrave, Clark’s Harbour, Mahone Bay, Bridgetown, Oxford, Hantsport, Parrsboro, Stewiacke, Shelburne, Middleton, Digby, Lunenburg, Berwick, Trenton, Port Hawkesbury, Pictou, Windsor, Westville, Springhill, Wolfville, Stellarton, Antigonish, Kentville, Yarmouth, Bridgewater, New Glasgow, Amherst, and Truro, in Canada.