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The topics in the Dial-A-Law series provide general information on a wide variety of legal issues in the Province of Alberta. This service is provided by Calgary Legal Guidance funded in part by the Alberta Law Foundation.
This topic discusses the garnishee of your earnings or bank account.
If you owe someone money and you do not pay, that creditor may take you to court and obtain a judgment for the debt. The creditor may enforce the judgment for debt by garnishee or seizure of your property.
A Garnishee Summons can be issued to have your employment earnings or your bank account collected and paid into Court. The Summons may also be issued to anyone who owes you money. If your employer is served a Garnishee Summons, the money must be into Court within 5 days of your payday for as long as the Summons remains in effect. Employers generally do not appreciate the extra administration time and costs garnishee proceedings can cause. While your employer cannot fire you because of such proceedings it can impair your continued working relationship. You may wish to consult with a lawyer if you are fired because of a Garnishee Summons. The termination of your employment may be improper.
If you are trying to hide assets, leave the province or are behind in your maintenance payments, you could be garnisheed prior to judgment and before the creditor has gone to Court to get the Garnishee Summons.
You may not receive official notice about the garnishee until 15 days, after the Garnishee Summons has been served. You will probably find out sooner when your earnings are reduced or your bank account balance is less than expected.
Some earnings are exempted from garnishment. The minimum exemption is $800 plus $200 for each dependant and the maximum exemption is $2400 plus $200 for each dependant. You may apply to the Court to change the minimum or maximum exemption. The Court will consider your family responsibilities, your personal circumstances, the handling of your financial affairs and other family member’s earnings. You will need to provide a written statement of your dependants to the garnishee or you will be presumed to have no dependants. Dependants include the following:
- Any person identified as a dependant by a Court Order.
- Any person the debtor is entitled to claim for the spousal amount for the purposes of the Income Tax Act
- Any child of the debtor who is under the age of 18 years and lives with the debtor.
- Any relative of a debtor or of the debtor’s spouse or spousal equivalent who lives with the debtor.
- Any person who by reason of mental or physical infirmity is financially dependant on the debtor.
If you have your salary deposited directly into your bank account there will be no exemptions deducted from the garnishee by the bank. Also certain pension funds are exempt from garnishee such as Canada Pension Fund. You should speak to a lawyer if your salary or other exempt pension funds are garnisheed from your bank account.
Joint bank accounts can also be garnisheed. If you have a joint bank account with another person, the bank must pay into Court the portion of the money in the account considered to be yours. For example, if there are 2 people named on the account, one of them being you, half the funds in the account would be attached by the Garnishee Summons.
The Garnishee Summons is effective for 1 year, except where a bank account is garnisheed. It is effective against money owed at the time the Garnishee Summons is served, as well as future obligations which may arise during the currency of the document. For all accounts, the Garnishee Summons expires on the earlier of (a) the first time the money is paid into Court and (b) 60days from the date it was issued.
There is no limit on the number of times a Garnishee Summons may be renewed. A creditor may continue to renew Garnishee Summons on your employer until all money owing to all creditors who have Judgments and Writs of Enforcement filed against you have been paid. Garnishment is expensive to you. The creditor’s costs are paid before any money is available to reduce your debt. Try to speak with your creditor to reach some type of repayment arrangements. You may try to negotiate a repayment plan even after the first garnishee. If you have more than one creditor, you should consider a payment plan for all of them. You can try to set this up yourself.
Alternatively, the nearest office of Credit Counselling service of Alberta can assist you. Call (403) 265-2201 in Calgary, (780) 423-5265 in Edmonton and 1-888-294-0076 toll free in Alberta. Debt counselors will assist you in exploring your options to deal with your debt. For example, arrangements can be made to pay pack your loan through the Orderly Payment of Debts Program. This is a legislated consumer repayment program. The program identifies all your debts and living expenses and assists you in developing a monthly repayment schedule. A request for a Consolidation Order of your debts is made from the Court. Your creditors are notified and they have 30 days to object to the order. Once the order is approved, you make monthly payments to the Credit Counselling Services of Alberta who distributes the payments to the creditors. You would be protected from further legal actions like garnishees. Your payments schedules are based on your ability to pay and your interest rate is fixed.
Confirm in writing any payment plan or settlement agreement with your creditor. While a Creditor will not allow the right to collect the debt lapse, they may not proceed any further if you make the agreed payments.