Does Bankruptcy Stop A Wage Garnishee?
Bankruptcy law is very powerful. Once a person files a bankruptcy a consumer proposal (and the filing is registered with the federal government), a powerful Stay of Proceedings is automatically in place. Creditors are banned from seizing wages, calling your house, or taking legal action to collect the debt, unless they go to Bankruptcy Court for permission to continue (a relatively rare occurrence). Your Trustee will submit a formal notice of the Stay of Proceedings to your workplace, which should stop the wage garnishee. If the person who manages your payroll is not familiar with the requirement to stop a garnishee in a bankruptcy, you may want to give their contact info to the Trustee for clarification. Finally, depending on the timing of the bankruptcy and your payroll schedule, the most recently seized funds may be returned to you. If the garnishee does not stop, contact your Trustee right away.
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