Wage garnishment is the process by which a creditor effectively intercepts money from debts owed to a debtor to pay down the outstanding amount of the balance. Most of the time, these debts are salary or wages from an employer. In Canada, there are a number of wage garnishment laws that apply to all provinces, but each province has its own peculiarities regarding when wages can be garnished, the amount to be garnished, and how that money is treated.
Prince Edward Island computes the amount of wages to be garnished on a case-by-case discretionary basis, with the limits set by the Prince Edward Island Garnishee Act. The Garnishee Act also specifies which debts are exempt from being garnished. For every case, the prothonotary of the province Supreme Court will determine the amount by examining each “item of basic need,” identified by existing regulations.
Needs with specific amounts are quantified on a weekly basis. For food, $30 is exempted for each of up to two people above 12 years of age, with $25 additional for every person afterward. An additional $20 is allowed for every child under 12 years old. Special allowances can be made for unusual dietary requirements for the debtor or a household member at the discretion of the court.
Clothing allowances amount to $15 for the head of the household, with $10 for every additional member.
Household and personal expenses allow only a maximum of $15 per family. $6 is guaranteed for the first person over 12 years of age, $4 for the second, and $2 for each family member thereafter up to the maximum. Children under 12 who receive allowances for child support payments, etc. are not considered for the additional $2.
Allowance for housing is dependent on the area the debtor lives. Amounts are set aside for rent or mortgage payments, as well as taxes, fire insurance, and other home-related expenses. These amounts must not be in excess of what a comparable residence in the same area would cost. What is reasonably expected for such accommodation in the area is determined at the discretion of the court.
A health care allowance is made for those who require necessary medical and/or surgical care. This care includes but is not limited to nursing requirements, dental care, optical care, any prosthetic limbs, and the cost of necessary prescription drugs. Again, what is determined to be necessary for the purposes of the medical allowance is left to the discretion of the court.
After all allowances are computed and considered, the Garnishee Act states that under no circumstances should the debtor be left with a lower amount of income after debt attachment than he or she should be left with under the Welfare Assistance Act. This stipulation only applies if the debtor is entirely dependent on his or her own income and does not receive assistance from a spouse, other family member, or other caretaker.
The final decision on whether a debtor’s wages should be garnished is left to a Prince Edward Island judge. The Garnishee Act provides him with the power to require that a judgment debtor (i.e. a debtor who has already received a judgment against him in a court case stating that he does owe some amount to the creditor) has his future wages attached until such time as the required amount is paid in full. The judge has the full power to determine the amount of the garnishment as long as it is in line with the Garnishee Act; generally, the judge will follow the calculations and recommendations already prepared by the prothonotary.
The debtor has four options once wage garnishment has been ordered and begun to stop the process: first, and most simply, she can pay the debt. Once the amount is paid in full, the garnishment order is fulfilled and the process is complete.
The second and third options both require working with a Licensed Bankruptcy Trustee. A consumer proposal is a legal process that, if accepted by the court, will cease wage garnishment as well as any future collection attempts against the debtor. Instead, a single monthly payment is made to the trustee, who disburses it to those owed money by the debtor in a prearranged fashion, to a maximum of 5 years. Usually this reduces the total amount of debt owed.
The Licensed Bankruptcy Trustee can also help the debtor declare personal bankruptcy. Note that both bankruptcy and the consumer proposal must include all uncollateralized debts owed, not just the specific amount causing the wage garnishment.
Finally, residents of Prince Edward Island are able to utilize an option called an Orderly Payment of Debts. This is a petition to the court to allow monthly payments to a counselor at a Credit Counseling Center. The usual period for these monthly payments is four years. If the petition is accepted, any wage garnishment currently active will be released, and the debtor is protected from future attempts at collection as long as monthly payments are continually met.
As with all legal situations, it is strongly suggested you contact a lawyer in Prince Edward Island to discuss your personal situation and examine all options available.
InfoAviator Publishing is a organization determined to help Canadian consumers understand wage garnishment laws that are currently residing in the cities and towns of (but not limited to) Alberton, Borden-Carleton, Cornwall, Georgetown, Kensington, Montague, North Rustico, O’Leary, Souris, Stratford, Charlottetown, and Summerside, in Canada.