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December 2007 - If you don’t want your employer would know you are in financial trouble avoid wage garnishment

If you don’t want your employer would know you are in financial trouble avoid wage garnishment

☳ by Adam Aspilla

Having a financial problem is not a situation you would like to brag about. In fact, if only possible you do not want somebody would know about it much more to your employer. However, if you do not know how the collection process works and if you are unable to pay your creditors despite repeated written and verbal demands it is inevitable your employer would know that you are in financial trouble.

 

In a nutshell, a normal collec-tion process is your creditor or its representative would send you a friendly letter of reminder if you are late on your payment. If you ignore said letter, next, your credi-tor would send you a first demand letter for you to pay your overdue account. Again, if you still ignore the first demand letter your creditor would send you a second demand letter for you to pay your overdue account or the entire balance of the amount outstanding within a spe-cific date, otherwise, legal action would follow without further notice to you.

 

Thereafter, you would receive a Statement of Claim issued by a Court of Law giving you an oppor-tunity to file a statement of defense on the claim of your creditor within 20 days from the time you receive it. Your failure to file a statement of defense within the time pre-scribed, the judge may render a default judgment against you.

 

The next thing your creditor will do is to move for the enforce-ment or execution of the judgment where the judge would order the garnishment of your wages. To garnish your wages, the court order would be forwarded to your em-ployer through the payroll depart-ment to garnish your wages. This is where you have no control and your employer would surely know that you are in a financial mess.

 

The way the garnishment be stopped is for you to pay off the judgment amount or to file for bankruptcy or consumer proposal. In either case your bankruptcy trus-tee or estate administrator would communicate to your employer to stop the garnishment.

 

To avoid garnishment, do not procrastinate in taking action to solve your financial problem. If have no funds to pay your arrears or you cannot secure a consolida-tion loan, consult with a credit/debt counselor for your alternative solu-tions. After properly evaluating your options make a decision and act on it without delay to avoid garnishment of your wages or else your employer would know that your are in financial trouble.

 

Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.