The topics in the Dial-A-Law series provide general information on legal issues within the Province of Alberta. The purpose of this topic is to inform you of your legal rights and responsibilities. This is not legal advice. If you require legal advice, you should contact a lawyer.
This topic discusses the garnishee of your earnings or bank account.
If you (debtor) owe a person (creditor) 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. The creditor must obtain a judgment from the court before any enforcement action can be taken. The creditor will need to file a Writ of Enforcement (Writ) and register the Writ with the Personal Property Registry. All creditors with registered writs will share in money collected when you have been garnished.
A Garnishee Summons can be issued to have your employment earnings or funds in 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, your employment earnings will be paid by your employer into Court within five (5) days of your payday for as long as the Summons remains in effect. Employers generally do not appreciate the extra administrative 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 as 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 garnished 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 fifteen (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 per month; this means that if you make over $800, half of all the money you make over $800 can be taken. The maximum exemption is $2400 plus $200 for each dependant per month; this means that if you make over $2400, all of the money you make over $2400 may be taken to pay the debt. 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 from the garnishee by the bank; the entire amount may be taken. The $800 and $2400 plus dependant exemptions will have to be applied for at the court. Certain pension funds are exempt from garnishee such as Canada Pension Fund. If the only monies deposited in the bank account are from the Income and Employment Supports Act, Assured Income for the Severely Handicapped Act (AISH), or the Widows’ Pension Act, then this money cannot be garnished. You should speak to a lawyer if your salary or other exempt pension funds are garnished from your bank account.
Joint bank accounts can also be garnished. 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 garnished. It is effective against money owed at the time the Garnishee Summons is served, as well as future obligations which may arise while the Summons is in force. For bank 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 arrangement. 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.
You may also contact any number of not-for-profit services in Alberta to assist you in negotiating a reasonable repayment plan, and for credit and budgeting advice. One such service, Money Mentors, can set up an Orderly Payment of Debts Plan, where the Court consolidates your debts and sets a monthly payment amount. Money Mentors can be reached at 1-888-294-0076. The Orderly Payment of Debts program identifies all your debts and living expenses and assists you in developing a monthly repayment schedule. Your payments schedules are based on your ability to pay and your interest rate is reduced to 5%.
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.
Dial-A-Law is a Calgary Legal Guidance public service project funded in part by the Alberta Law Foundation.