How do I Stop a Wage Garnishment by Making a Deal with My Creditor?

Posted in Consumer Proposals
Posted by J. Douglas Hoyes, CA, CPA, LIT, CIRP, CBV

stop-garnishment-consumer-proposal-updatedIf a creditor has already gone to court and obtained a garnishee summons allowing them to garnishee your wages, the wage garnishment will only stop once it is paid, or if the creditor agrees to stop it.

You can attempt to make a deal with the creditor. Here are two ways you can do this.

Approaching Creditors On Your Own

Call the creditor, or the creditor’s lawyer, and offer to make a settlement.

You could tell them that you agree to pay the balance owing, and you will provide them with post dated cheques to repay the debt.

It is possible that if you speak directly with the creditor, they may agree to alternate payment arrangements

However, in our experience, it is highly unlikely that a creditor will agree to stop a garnishment once a garnishee summons has been ordered. Here’s why:

You owe the creditor money. They tried to collect with phone calls, letters, and collection agents, and they were not successful. They then spent the money to go to court to get a garnishee summons. Now they are receiving money from your employer every time you get paid. Why would they cancel a sure thing (money from your employer) in exchange for possible payments from you, probably for a lesser amount than they are getting already?

Clearly, it is unlikely they will agree to that type of deal.

Making A Settlement Offer Through A Consumer Proposal

Trying to negotiate directly with the creditor is worth a try, but if it doesn’t work your next option would be to consider a consumer proposal.

A consumer proposal is a formal debt settlement process under the Bankruptcy and Insolvency Act which means it provides you with the benefit of a stay of proceedings that stops most garnishments.

There are several benefits of dealing with a garnishment through a consumer proposal including:

  • The garnishment can be stopped immediately. Once you file your employer will be notified right away to stop taking money from your pay.
  • You can make a settlement to deal with the debts subject to the garnishment.
  • You will also deal with other outstanding debts you may have, giving you a fresh financial start.
  • A consumer proposal allows you to keep any assets you own including a home.

If you are threatened with a wage garnishment, or are currently being garnisheed, we recommend that you call one of our offices in Ontario or e-mail us immediately to determine your options.

how to stop a wage garnishment

About J. Douglas Hoyes

Doug is our co-founder and is a Licensed Insolvency Trustee, Consumer Proposal Administrator, certified Insolvency Counsellor and Chartered Professional Accountant.

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2 thoughts on “How do I Stop a Wage Garnishment by Making a Deal with My Creditor?

  1. April Cook

    I didn’t know that there was a way to stop wage garnishment. Do you need to have a lawyer to file consumer proposal? This sounds like it would be a good way to deal with the issue and take control of the situation. Can the creditor refuse this proposal, or can they be forced to accept it? thanks for this information.

    1. J. Douglas Hoyes, CA, LIT Post author

      Hi April. Yes, a consumer proposal stops a standard wage garnishment. In Canada lawyers are not permitted to act as consumer proposal administrator or bankruptcy trustees. Consumer proposals are filed by Licensed Insolvency Trustees, such as the professionals at Hoyes Michalos. A creditor can vote against a proposal. In the vast majority of cases we can negotiate with them and reach a resolution that works for all concerned.


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