Debt Relief Experts
Yes. A consumer proposal is one of the fastest and most effective ways to stop a wage garnishment in Canada. As a legal proceeding under the Bankruptcy & Insolvency Act, filing a consumer proposal provides Canadians with immediate protection from creditors, including stopping most wage garnishments, often within hours of filing.
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How Quickly Can a Consumer Proposal Stop My Garnishment?
When a creditor obtains a court order to garnish your wages, your employer is legally required to comply and deduct money from your paycheque. Your payroll department can only stop these deductions when they receive another valid legal order – which is exactly what happens when you file a consumer proposal.
At Hoyes, Michalos & Associates Inc., we understand the urgency of your wages being garnished. In most cases, if you file a consumer proposal with us at 9:00 a.m., we can have a court order faxed to your employer by noon that same day to stop the wage garnishment. This quick action helps protect your income and gives you immediate relief from collection actions.
Which Types of Wage Garnishments Can Be Stopped?
A consumer proposal will immediately stop wage garnishments from most creditors, including:
- Credit card companies
- Banks and credit unions
- Canada Revenue Agency (CRA) for government debts including tax debts and student loans
- Payday loan lenders
- Personal loans and lines of credit
- Collection agencies acting for creditors
However, there are important exceptions. A consumer proposal cannot stop wage garnishments related to:
- Child support or spousal support obligations
- Court-ordered restitution for criminal offences
What Makes a Consumer Proposal Effective at Stopping Garnishments?
A consumer proposal works by providing:
- Immediate Legal Protection: When you file a consumer proposal, you receive an automatic stay of proceedings that legally prevents creditors from continuing or starting wage garnishments.
- Court Authority: The consumer proposal is filed with the Office of the Superintendent of Bankruptcy and is backed by federal law, which means creditors must comply with the stay of proceedings.
- Long-term Debt Solution: Beyond just stopping the garnishment, a consumer proposal helps resolve the underlying debt problem by allowing you to make one affordable monthly payment to settle your debts.
A consumer proposal or bankruptcy is the only legal process that can stop a wage garnishment order without requiring full payment of the debt.
Considering a consumer proposal?
What Steps Do I Need To Take
To stop a wage garnishment through a consumer proposal:
- Book a free consultation with a Licensed Insolvency Trustee
- Provide details about your debts, income, and assets
- Review and sign your consumer proposal documents
- Once filed, we notify your employer immediately to stop garnishing your paycheque
- Your creditors have 45 days to vote on your proposal
Important: We cannot notify your employer to stop the wage garnishment until your consumer proposal is officially filed. This means you need to take action quickly if your wages are being garnished.
What Happens After the Garnishment Stops?
After your consumer proposal stops the wage garnishment:
- Your full wages will be restored
- You’ll make one monthly payment based on what you can afford
- The payment will typically be much less than what was being garnished
- You’ll be protected from future garnishments while completing your proposal
- Most people complete their proposal in 3-5 years, after which the remaining debts are legally eliminated
Don’t wait until more of your wages are garnished. Contact Hoyes Michalos today for a free consultation to learn how we can stop your wage garnishment and help you get debt relief through a consumer proposal. Our experienced team can typically have your garnishment stopped within hours of filing.
