Can A Creditor Go After My Paycheck In Canada?

Can A Creditor Go After My Paycheck In Canada?

Yes! This is called “Wage Garnishing” in the legal parlance and is an avenue available to creditors to recover monies that they have lent to their debtors. This legal procedure is made available to collection agencies, Canada Revenue Agency, any Court in Canada, credit card companies, payday loan lenders, and any other creditor who has to lend you monies could recover such due payments through wage garnishment.

But there are very strict legal procedures that they would need to fulfill first before they could go after your paycheck. Even if they do they are entitled to recover only up to 30% of the amount that you would have in your account.

Try and exhaust all avenues

To do so the creditor would need to lend you money which would then make the entity your creditor. Thereafter you should be classified as a defaulter who has not paid the due amounts as per the agreed terms of repayment. The creditor should have tried the normal avenues to recover the due payments. These are by calling you, by writing to you, and only if they have exhausted these avenues available to them could they go after your paycheck.

To get a wage garnishment order the creditor has to sue you in a court, and obtain the wage garnishment order before they could walk into your bank or employer and take what is due to them. Every legal procedure that is laid down pertaining to wage garnishment has to be fulfilled before any court would issue such an order. The court would need to be satisfied that you are liable to pay, and you are in default and that you are able to pay before they would grant the wage garnishment order against you.

The creditor has to satisfy the court that they have an issue with you and that you have been in default and even if you do not attend courts the order could be issued against you for your wage to be garnished and they could recover the due amounts but only up to 30% as said earlier. Once the creditor has obtained the order from the court they could request for a writ to be served on your employer or bank as the case may be to recover the 30% of your wages every month until the debt is repaid. There would not be anything much either you or your employer could do once the court has issued the necessary legal documents.

Alternative to wage garnishment

Wage garnishment would be the last resort if you are devoid of any other physical assets. For instance, if you have physical assets, the creditor whomsoever it would be, could seize those assets rather than waiting for every month when you wage is due or being credited into your account. It is only those who would generally have no tangible assets who would be subjected to wage garnishment. It would mean that you are devoid of any assets and what you have is only your wages which would be what your creditor could come after.

There are laws specifically legislated as to what assets could be seized and what not hence there is ample protection for a debtor like there are avenues available to any creditor too. In some provinces and also under Canadian federal law specifies the type of assets that could be seized in lieu of wage garnishment if the creditor prefers so. Though the laws across Canada could be more or less the same but in the jurisdiction of British Columbia, no household goods or appliances could be seized if its sale value is more than $4,000.

It is also legislated that clothing and other personal assets cannot be seized to recover debt from a creditor. If your vehicle is valued at more than $5,000, then that too cannot be seized. On the contrary, if you have a bank account and the creditor knows where it is they could seize all the monies in your bank account by disclosing the same to the court and taking out a writ against you and the account and taking it to the respective bank. The total amount due could be recovered by the creditor if they are privy to this vital information.

What you could do

There is nothing much you could do about it and any court too would issue a writ without second thoughts as you are in default but holding money in an account without repaying your debts is how they would look at it.

Though a creditor could only recover up to 30% of your wages this scenario changes if you are self-employed in which case your creditor could recover all your earnings up to 100% to recover their debt or part thereof. The creditor would need to have this information before they would go to court and when they do it would be too late. Hence it would be in your best interest to sit with your creditor and work out a payment plan before things get out of hand and it comes down to this.

Many avenues are left open when a debtor falls in default and one of the things you could do is talk to your creditor and reschedule the amounts due to suit your new payment plan. In most cases, the creditors would accommodate such requests as they too would not prefer to sort it out by resorting to legal action. The law in Canada is quite balanced and fair with most issues from both divides taken into consideration but at the end of the day when you are in default, you may have to pay back any which way you can.

Wage garnishing should be the last resort even if you are in arrears and are in default as you have the option of resorting to an amicable settlement to the repayment of dues. It is only when you avoid such an option that the court too would take the onus on it to ensure the creditor is paid back. Any help for financial problems contact or call 416 650 1100

Planning For A Lower Income In Canada

Planning For A Lower Income In Canada

The 2016 census showed some glaring statistics and one of the most shocking was that 4.8 million Canadians were living below the poverty line. Canada has a population of 36.95 million and of that 4.8 million is a shocking 13% which does not bode well for a country that many people from around the world are clamoring to migrate to. This has given the country a unique place in history and that is many people do plan to live below the poverty line as then they could obtain and procure various benefits from the provincial as well as the state governments.

Low income a definition

There are three very important criteria that would define whether a person of a family is below the poverty line and classified as “Low Income”. The first one is the Statistics Canada measurement which employs the “Low Income Cutoff” (LICO) which is based primarily on the ability for that person or family to buy their necessities. They also use the “Low Income Measure” which is based on the inequality of a person or family in relation to their income. These two are what Statistics Canada would employ to measure the issue of Low Income.

The Human Resources and Skills Development Canada (HRSDC) employs a different index which is the “Market Basket Measure” which is also similar to the above and is the ability for a household to afford the necessities that they would require to live a healthy and nourished lifestyle.

Though these three indexes are employed there is no response from the Canadian government to measure the poverty level though they would also refer to the “Low Income Cutoff” (LICO) when required but would always deny or not accept that there is a problem with poverty in Canada. The Canadian Council of Social Development (CCSD) would use the LICO for their purposes but with no proactive willingness to accept that there are Canadians below the poverty line. Hence there is no official measurement to see what poverty is in Canada.

The Low Income Cutoff (LICO)

The LICO is the poverty cutoff line where a family would usually spend about 20% of their household’s total income to procure their necessities. This would include food shelter and clothing and would compare directly with what an average family would spend for their necessities in that province. The measurement works thus and that is if an average family would spend 30% of their total household’s income but another household would spend 50% then the latter is considered to be below the poverty line and is considered Low Income for all purposes.

Statistics Canada would go a step further and calculate the Low Income Cutoff (LICO) before a family pays tax and after a family pays tax as LICO-BT and as LICO-AT respectively.

The Low-Income Measure

There are families that earn less than half of what an average household would earn and when they do they are categorized as a Low-Income family. The Low-Income Measure (LIM) was developed by Statistics Canada in 1991 to study income patterns across the country. This measurement would measure inequality in income generation rather than purchasing power which could depend what they would earn as a household.

The Market basket Measure

The Market Basket Measure was introduced in 2003 by the HRDSC which would estimate the cost of a basket of essentials which would include food, clothing, housing and transport. When it was calculated in 2006 it was found that this would be around $ 31,399 for a family of four residing together in one common household.

The reason for these measurements

These measurements especially the LICO is taken as the standard when the provinces want to determine the quantum of tax that would have to be paid by a person or household. If they are closer to the poverty line they would be given some relief when it comes to paying their taxes. In British Columbia where the government directly funds the health care system those who are below or closer to the LICO would be given certain relief to pay less when they attend these clinics. If they are closer to the LICO line they would be deriving benefits when they seek medical attention in government-funded hospitals and clinics. This is a very important aspect as health care could be generally very expensive in Canada.

Whilst immigrants could have a few advantages, they would be disallowed from sponsoring next of kin if they are below the LICO line. This would be an issue that they would need to rectify by increasing their income and getting out of the LICO line. This is understandable as the government would not accept double liability when the sponsor is below the LICO line.

The shocking results

Being closer or below the LICO could provide you some relief but it may not be a very conducive way of living. Take your retirement seriously as it is inevitable and you would only need to plan for it well in advance.

It is generally known that statistics would never lie and those below the poverty line in Canada are able to obtain many benefits but the issue comes round as to why anyone after migrating to such a country would like to live in poverty. They would be better off living in their own country.

If you are planning to live on a lower income then life could be quite tough and could bring an immense strain on you and your family. There may be benefits that you would receive but in the long term, it would not be a very good idea. Saving would be your best choice and for that, you may need to begin early and not wait for the last moment when it is time for you to retire.

You could plan your retirement well in advance and if you look around there are many avenues to secure your twilight years especially in Canada where opportunities are galore. Any help for financial problems contact or call 416 650 1100

5 Tips for Buying a New Car In GTA

5 Tips for Buying a New Car In GTA

Buying a new car is always exciting and when you think about driving your new car you just are in a different world altogether. It is indeed not an easy decision as it needs you to consider some basic things to help buy the right car in your budget. Of course you need to look for the right model and make that suits your needs and along with it comes a lot of other things that you need to consider.

The article will share some important tips that would help you in the process.

Make and model of the car

Of course you want it right. You will be driving your car and you need a car that caters to your needs as well as you enjoy driving your new car.

Ask these questions that will help you pick the right make and model while looking out for a new car.

  • Do you want a car with huge storage space to keep sports equipment or family items?
  • Is the car fuel efficient and compact enough to suit your style?
  • Do you your car to give you the royal feeling of being a king/queen on the road?
  • Or you are hunting for something that lets air come in to play with your hair?

The answers to these questions will help you create a list of different vehicles you love or someone had recommended you. When you are on the road, just be alert and look for different makes and models of car that you may not have noted down in your list. You can then compare those makes and models to pick out the best that you may want to go for a test drive.


You may be ready to spend a little more or even a lot depending on what type of car you want to buy. Before you could prepare your list and pick the makes and models you want to try for a test drive, just determine your budget and ensure you have a spending limit based on your earnings to pay the down payment and further EMIs. You can ask these questions and find out the answers yourself to sort out things

  • How much can you spend?
  • Are you going to pay down payment?
  • What amount can you afford against monthly payments?
  • Any amenities on your list that you consider as most important ones?
  • Will it affect the rates of your car insurance?

Try to find out the current market value of your existing vehicle and then determine whether you want to sell it off privately. It could influence your car or down payments whether you choose to trade-in or sell privately.

Buyer experience      

Get into some research to find out the car dealerships near you. Make sure you gain knowledge that would help you sail through the process of purchasing a new car like

  • Does dealership offered lowest price through advertisements? Or they can negotiate?
  • Will the dealer offer vehicle maintenance on purchase of a used or new car?
  • Are financing or auto loans offered by dealers and if yes what terms are offered currently?
  • Are you looking for leasing versus purchasing a car?

If you wish to buy your new car privately via a private party then you can make use of online sites to check the rating of the seller and find out whether the reviews comprise of any complaints against the sellers to whom he/she has dealt with. Do not forget to check the maintenance history of the vehicle and ask for a test drive in different weather conditions, traffic conditions and different roads.

Research well

Nowadays you can find almost all information you need on the internet.  Consumers can access various resources online to pull out the information about any product or services. You can do a quick online research to gain knowledge about different models and related buying tips for first time buyers of vehicles so that you are confident while buying your new car.

You can find a lot of websites on the internet that are designed to the buying process of cars and they are quite informational.

Best time for car purchase

Well, there is no hard and fast rule that you need to follow to pick the best time when you should buy a new car. It is solely your decision as when you want to buy it. Still, the time span that is recommended to buy a new car is end of summer season, period when inventory is evaluated etc.

In case you feel your existing car can meet all your needs with some upgrades,           you can think about it as you will be able to save a lot of money. You can add certain equipments or parts to make it enhance it performance, storage etc.

Of course you need to negotiate the price with the car dealer while purchasing a new car. Just do not agree on said price. You can just search the price online before you could visit the dealer to get a fair idea about the current price. Try to negotiate and get the best deal. It is better to negotiate the quoted price than negotiating your monthly payment. Make sure you get the price you want. Before you could buy a new car make sure you determine your budget and how you are going to pay the monthly instalments.

If you are seeking car loan and check for the lenders that offer lower rates of interest. Once your loan is approved you will get to know the amount you can spend. You can also compare the interest rates with car dealers      as you may get better rates. Make sure you arrange for your documents to get loan approval before you start looking for a loan.

The tips given above will help make a smart move and smart decisions and enjoy riding your new car.

What is the Difference between Profitability and Cash Flow

What is the Difference between Profitability and Cash Flow

When it comes to profit & cash flow both the terms are different for a profitable and growing business. Yes, these two terms are completely different.

Both elements are crucial for any business to grow and flourish. Both elements function differently for a business. Let us learn about how these two elements are different.


Profit is the remaining amount after the deduction of all expenses from the revenue generated by the business. It goes without saying that any business should earn profits in order to sustain itself in the market for the long term. In any business, the expenses increase towards launching new products or any other investments for the business, and thus the business experiences fewer profits in a short span of time.

Cash flow

Cash flow means inflow & outflow of cash from a specific business. It is important to manage the cash flow properly to carry out daily operations, buying inventory, paying taxes, giving out salaries to the employees, and many other costs smoothly.

Basically, cash flow gives you a fair idea of the actual cash available for your business. On the other hand, profit will not help you get an idea.

Many businesses have this misconception that profit & cash flow are similar to each other. But, they are having no similarity. For any business to survive it should make profits and also maintain appropriate cash flow. The two elements reflect two different financial parameters but for any business to survive in the long run need to have a system that tracks both elements accurately.

The cash flow can either make or break a business. For any business actually cash flow decides its ability to survive and not the profit.

Why cash flow is crucial for every business?


Maintaining debt and bills

It is important to have a sufficient amount of cash in hand to run any business successfully. If you have borrowed funds to purchase equipment, inventory then you need a sufficient amount of cash flow to make repayments on time to avoid paying extra cash as penalty.

Buying inventory

When you have positive cash flow that means there is enough money in hand to buy inventory whenever you need it. There can be adverse effects on your business if you do not have enough cash in hand like negative customer experience, stock-outs and you may also land up in trouble when you have to borrow more funds to repay the existing debts.

Controlling high sales time

There can be an increase in demand thereby increasing your expenses in business-like staff expenses, warehouse space, inventory expenses, marketing efforts, etc. When there is the positive cash flow available you will be able to make important business decisions easily and will be prepared to encounter high sales periods by investing correctly which will directly help your business do well and generate profits during peak season.

Help your business grow

Expansion is necessary with time which also needs you to invest money in resources and in various promotional activities. All the activities need the money that again means your business should have required cash flow to expand and make necessary investments when the opportunity knocks.

Managing cash flow properly is essential

If your business is making profits in the short term, then it can sustain in the long run as well if you have enough cash to clear all your bills and make necessary investments in the business.

If your business is making high profit but the cash flow is low then your business will be called a profitable business that is not capable of paying the bills. On the other hand, if you are paying all your bills also doesn’t mean your business is profitable. If any business has borrowed funds to overcome cash flow issue the debt on the loan would automatically increase thereby increasing the cost per unit and in such cases, your business will not be profitable even after having enough cash available.

Irrespective of what business model you are using your business is at risk if you are not able to manage the cash flow well. All successful business maintains cash reserve and therefore they are profitable.

You can seek help from a financial planner to work out the cash flow. Positive cash flow control will not happen overnight. It needs proper planning and help from professionals. The professionals in the finance sector can help your business develop a positive cash flow by conducting analysis and then planning it right. They will help you learned the aspects that would help your business have enough cash in hand to help you make important business decisions smartly and invest in new opportunities.

The profit and cash flow are different elements in a business and they aren’t similar to each other. Both elements are important. You need to look upon each of the two elements closely and manage them properly. It is always better to seek help from financial consultants so that you know how to manage cash flow properly and invest in new opportunities wisely.

You can help your business become profitable with the right approach towards the management of cash flow and managing profits to avoid getting into high debts.

For any business to run smoothly having enough cash in hand is essential and towards the growth of your business, you can grab the new opportunities and make investments only if you have enough cash flow.

Again if your cash flow is positive doesn’t always mean your business is profitable and on the other hand, if your business is profitable and still you are not able to pay bills then again you are stuck. It means you have to take care of both components for a business to grow. Do not think about cash flow and profit as similar elements as they are different and affect the business differently. So they need to be taken care of equally. Make sure you consider the two important elements of business and manage them well. Any help for financial problems contact or call 416 650 1100


Undеr thе Ваnkruрtсу & Іnsоlvеnсу Асt, thе fеdеrаl lеgіslаtіоn thаt gоvеrns thе bаnkruрtсу рrосеss, whеn уоu dесlаrе реrsоnаl bаnkruрtсу а Lісеnsеd Іnsоlvеnсу Тrustее іs арроіntеd. Оnе оf thе trustее’s tаsks іs tо tаkе уоur аssеts аnd dіstrіbutе thе рrосееds frоm thеm tо thе сrеdіtоrs.

Іn саsе оf а bаnkruрtсу, аn RRЅР іs, аs аn аssеt, lіquіdаtеd аnd thе funds аrе dіstrіbutеd tо сrеdіtоrs. Тhеrе аrе, hоwеvеr, sоmе ехсерtіоns tо thіs rulе.

Fіrst, іf уоur RRЅР іs lосkеd-іn аs а rеsult оf уоur рrеvіоus еmрlоуmеnt, thе trustее саnnоt sеіzе thе RRЅР. Тhе mоst соmmоn ехаmрlе оf а lосkеd-іn RRЅР іs аn еmрlоуее whо wоrks fоr а соmраnу wіth а реnsіоn рlаn. Тhе еmрlоуее lеаvеs thе соmраnу bеfоrе rеtіrеmеnt, sо thе еmрlоуее’s ассumulаtеd реnsіоn еntіtlеmеnt іs соnvеrtеd tо а lосkеd-іn RRЅР.

“Lосkеd-іn” hеrе mеаns thе еmрlоуее саnnоt саsh іn thе RRЅР, оr tаkе mоnеу оut оf thе RRЅР untіl hе/shе rеtіrеs. Іf thе еmрlоуее саnnоt gеt thе mоnеу, іn mоst саsеs а Lісеnsеd Іnsоlvеnсу Тrustее іs аlsо unаblе tо ассеss thе mоnеу іn thе RRЅР.

Соnfusіоn іs оftеn сrеаtеd bу thе tеrm “lосkеd-іn”. Маnу Саnаdіаns соntrіbutе tо аn RRЅР аt thеіr bаnk, аnd thе funds іnsіdе thеіr RRЅР аrе іnvеstеd іn а “lосkеd-іn” іnvеstmеnt, suсh аs а guаrаntееd іnvеstmеnt сеrtіfісаtе (“GІС”). Іt’s “lосkеd-іn” fоr а реrіоd оf, sау, fіvе уеаrs, sо thаt thе іnvеstоr саn еаrn а hіghеr іntеrеst rаtе.

Іf уоu оwn а fіvе-уеаr GІС, іn mоst саsеs уоu саn саsh іt іn еаrlу; bу dоіng sо уоu lоsе thе іntеrеst уоu hаvе еаrnеd.

Іf уоu wеrе tо fіlе fоr bаnkruрtсу, thе trustее wоuld саsh іn уоur fіvе-уеаr GІС аnd dіstrіbutе thе funds tо уоur сrеdіtоrs. Іn thіs саsе, уоu wоuld lоsе уоur RRЅР іn bаnkruрtсу.

Тhе оthеr tуре оf RRЅР thаt іs usuаllу ехеmрt іn а bаnkruрtсу іs аn RRЅР thаt hаs а lіfе іnsurаnсе еlеmеnt. Тhіs іs а mоrе соmрlісаtеd аrеа оf thе lаw, аnd а trustее’s аdvісе shоuld bе sоught tо dеtеrmіnе іf уоur RRЅР thrоugh а lіfе іnsurаnсе соmраnу іs ехеmрt іn а bаnkruрtсу.

Fіnаllу, Віll С-55, раssеd іn Νоvеmbеr 2005, рrороsеd thаt mоst RRЅРs wоuld bе ехеmрt іn а bаnkruрtсу except purchase RRSP in last 12 months. If you any issue’s with RRSP in while doing Bankruptcy, contact us at or call 416 650 1100

Teach Your Kids Financial Responsibility

Teach Your Kids Financial Responsibility

How You Can Teach Money Management to Kids

Meta Description: Read this to know how you can effectively teach your kids money management and financial responsibility.

Meta Tags: money management, financial responsibility

“You must gain control over your money or the lack of it will forever control you.” – Dave Ramsey

Effective money management can be a key to a fulfilling life. To understand the value of money and to know better about its right use is as important as understanding the need for oxygen.

It’s important for everyone to manage their money wisely and control the expenses in order to avoid a situation where they find themselves under the immense burden of debts. Financial responsibility and money management are some important things that everyone should be aware of.

As we grow older, we learn more and more about the value of money. Indeed, life has its own way of teaching. However, kids in today’s times, lack the knowledge of money management. Although they are well capable of spending money online on various games and apps, they still lack a sense of financial responsibility.

Therefore, it’s the duty of the parents to provide awareness to their children regarding financial responsibility and teach adequate money management. The appetite for money management from an early age is important because kids will then know how to spend their money wisely in college or their whole life, for that matter.

Here are some ways in which parents can teach financial responsibility to their children.

Be an inspiration

Kids learn what they see. Their parents are the best source of learning for them. Set an example yourself and ensure healthy money management in your home. Do not spend extravagantly, and also let your children know that you only invest in what is important or beneficial.

Discuss normal house finances with them

Casually discuss with your kids about the things at your house that require money to stay the way they are. Let them know that TV, electricity, gas and even the internet that they use come from money. If you do not have money to pay for them, you will be deprived of these privileges and necessities.

Ask for their opinion as they grow up

We all plan monthly budgets. It’s what makes us live through the month without having to worry about the issue of money a week prior to your payday. When your kids are well capable of understanding the basics of money management, involve them in home budgeting. Ask them what they think needs investment and what does not.

Teach them lessons through their pocket money

Allow your kids to set a budget for themselves in the form of pocket money. Teach them how they can better spend that money and also give them space and freedom to evaluate their understanding of money management.

Teach them the importance of savings

An important part of money management is savings. Tell your kids how important it is to save money for the time of need and how they can do it. Subtly let them know how you incorporate saving in your lifestyle.

Teaching kids financial responsibility is like planting a tree. If they learn about money management at an early age, it is going to benefit them and the people depending on them for life. However, be subtle with your approach. Kids should see money as an important thing, but not the only thing in the world.