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When Does a Garnishment Get Lifted in a Consumer Proposal?

I met with a lady in Barrie who had just started a new job after being out of work for nine months. During the time she was out of work she had accumulated a lot of credit card debt as she was using them to survive and cover her daily cost of living. It got to the point where there was no more room to use on any of her four credit cards and although she just started a job, her income was not enough to make ends meet.

We met and went over some numbers and she decided to do a consumer proposal as she felt better if she paid back some of what she owed.

The next day I received a frantic call from her saying a creditor had just garnished part of her wages. She was so embarrassed and did not know what to do, or who the creditor was as she said she never received anything in the mail. I advise her to get a copy of the garnishment from her payroll administer and send it to me right away.

It turns out it was a creditor she owed from a long time ago, a line of credit, and when they discovered she was working they collected on the debt and garnished her wages. I called the debtor to discuss this old debt and the wage garnishment and advise her the sooner she could come in to sign her proposal, the sooner the garnishment would be stopped.

The debtor was shocked as she assumed the garnishment would stay until she paid her proposal off in full. I advised her that the garnishment would be stopped or ‘stayed’ after her proposal was filed. The woman was relieved and most grateful for our service. I also informed her that should she not fulfill her proposal, meaning the regular monthly payments, and her proposal annulled, the garnishment would be enforceable again and restart.

By doing the proposal and lifting the garnishment, the debtor now had some breathing room and was able to make her payments and still have money for her daily cost of living.