If you live in the province of New Brunswick and owe a significant amount of debt, you may want to take a moment to read this blog. While parts of it may be a little technical, new legislative changes have been made to New Brunswick’s debt collection laws, which could impact your relationship with your creditors.
Early in November, the province of New Brunswick introduced the new Enforcement of Money Judgments Act (EMJA). The EMJA is a piece of legislation that widens the scope of assets that creditors can seize in the province of New Brunswick. The act officially came into force on December 1, 2019. While there were various amendments made to the previous laws, here are the main highlights that New Brunswickers should know:
CREDITORS CAN NOW GARNISH YOUR WAGES
Historically in New Brunswick, creditors could not garnish the wages of an individual unless they were the CRA or the garnishment was for Family Support Payments, such as child support. Now with the EMJA, any creditor can apply for a judgment by the courts and garnish the wages of an individual until they receive the amount owed to them. This means that creditors are now permitted to reach out to your employer directly to have them set up the garnishment.
YOUR RETIREMENT FUNDS ARE PROTECTED
Even though wages are now open to garnishments, your hard-earned retirement funds are not. Creditors are not allowed to seize retirement funds such as RRSP and pensions, no matter where they are held.
It is important to note that once you begin drawing from your RRSP or your pension, that money becomes income and just like it is susceptible to income tax, it will also be available to garnish.
EXEMPT ASSETS ARE NOW AT THE DISCRETION OF THE SHERIFF
Previous provincial legislation dictated that certain assets of an individual (i.e., a vehicle, medical equipment, household goods) up to a set predetermined amount could not be seized by creditors. Now with the EMJA, the Sheriff hired by the creditor dictates what assets are exempt and at what value amount. Individuals will no longer have an idea of what assets they will be allowed to keep and it will vary on a case by case basis. For example, if you live close to public transportation, it is up to the Sheriff whether you still need your car to get to work or not and your vehicle could be at risk of seizure.
WHAT TO DO IF YOU ARE AT RISK OF A GARNISHMENT OR JUDGMENT
If you owe a significant amount to a creditor and they are threatening collection, you may be at risk of garnishment or a judgment from the courts. While there is no way to stop a judgment after it has been filed other than to pay the money or make an arrangement with the creditor yourself, you also have the option of seeking help from a Licensed Insolvency Trustee. Licensed Insolvency Trustees are federally authorized to administer consumer proposals and bankruptcies. In most cases, judgments and garnishments stop immediately once an individual has filed a bankruptcy or proposal, along with all other collection attempts.
If you are a resident of New Brunswick and have questions or concerns about how the Enforcement of Money Judgments Act might affect you and your livelihood, please reach out to a Licensed Insolvency Trustee. We offer free consultations to review your financial situation and answer any questions you may have. You can call our New Brunswick team toll free at 1-888-455-6060 or book a consultation online at the office nearest you.
To read more about the changes enforced by the Enforcement of Money Judgments Act (EMJA), visit the Government of New Brunswick’s website.