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Disabled (PWD) Sued for Wage Garnishment

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balkanchick View Drop Down
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    Posted: 18/August/2016 at 4:56pm
Hi,

I've been dealing with CBV Collections for the past few months. I sent them everything they asked for, TWICE. And this is not even the first time. 

I was working with them and hoped to prove that I am in dire financial straits and would not be able to pay off my $16K+ BC student loan. I filled out a Financial Report and all documentation, twice. 

They were supposed to review my case for hardship. But today, I get a call and I am told that my wages will be garnished. The agent asked which bank I use and the name of my employer before telling me about garnishing my wages.

I am on PWD and receive $906 in monthly assistance. I am working part time, weekends only, for $500 a month. 

I have been out of school since 2008 and have never worked full time. I worked for $250 a month from July 2014 to May 2016. The only reason I am working even though it's affecting my mental health in a negative way is because I just don't have enough money to live on and that is even more detrimental to my mental health. 

I am 32 years old but am dependent on my mom. She claims me on her taxes and I have a Disability Tax Certificate on file with the CRA so I can claim the Disability Amount.

I am wondering if I file for bankruptcy, will it affect my mom since I am her dependent? Is our household considered to have 2 people since we live together and are our incomes going to be added up to calculate surplus income?

Also, I read somewhere that if my wages are garnished, even my disability assistance can be taken from my bank account. Is that true? Should I ask for my disability cheques to be mailed to me instead?

Thank you.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 21/August/2016 at 3:02am
Thanks for posting and sorry for the delay and getting to approve this post. 

The collection agency is only out for money. They will not likely help you with a hardship claim.  

They may be threatening to garnish your wages to try to scare you into paying. It might come to that, but there are rules around applying for a garnishment.    It may just be an empty threat.   They are very manipulative and will instill fear if they can.

There is info here on dealing with collection agencies...
http://canadastudentdebt.ca/collectionagencies.asp

Bankruptcy will not affect your mother, unless she was a co-signor on the loan, in which case they would try to collect from her. But that is unlikely because if she were a co-signor they would have already been trying to collect from her.

Can you provide additional details... Who is the original lender? Is it OSAP or some other province?  Can you provide details on how your loan went into default?  There is a Repayment Assistance Program... were you able to apply?

First of all, protect your self and your income. Make sure that your current bank is not the bank that you had your student loans with.  I've never heard of disability cheques being garnished but a bank has a right of offset and can take money out of your account if your account is with the bank that you owe money to.

We're here to help.  If you provide more details we can try to help.
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Mark O'Meara

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Post Options Post Options   Thanks (0) Thanks(0)   Quote balkanchick Quote  Post ReplyReply Direct Link To This Post Posted: 21/August/2016 at 7:37pm
Hi,

Thank you replying. I was freaking out while awaiting a reply and contacted a bankruptcy trustee.

The loan is a BC Student loan. I think it's a guaranteed one taken out in 2003. I did the whole repayment assistance for years. I never worked after finishing or rather not qualifying for any more loans due to a number of medical withdrawals and unsuccessfull terms. I was last in school Dec 2007. I graduatec with an Associate's in feb 2008.

Could not work due to mental health issues. Couldn't deal with Revenue Services of BC anymore. Now the loan is with a collection agency.

A few weeks ago I applied for forgiveness for permanently disabled borrowers. Haven't heard back yet.

Been on provincial dusability since 2011. Part time work could be garnished. Wanted to get ahead of that.

Revenue Services of BC were helping me defer payments but they just seemed to be purposely losing documents they requested from me like financial reports and stuff to the point where I had mailed, faxed the damn thing multiple times. I just gave up. I couldn't handle my mental health issues and watching my father wither and die in front of me from cancer.

I just refused ti deal with it. I didn't know how else to function,

The trustee told me that the collection agency would have to file a claim and serve me before any garnishment. So, tomorrow, I'm going to call and check on the status of my forgiveness application.

My disability cheque will be deposited early Wednesday. It's the same bank as the loan but it's a different account. I already closed one account years ago because Canada Student loans would try and take my money out every time the six month repayment assistance ran out and I had forgotten to apply fir it again.

Anyway, I think I'll just close the account and open one in a different bank after Wednesday. I doubt they can get their hands on my bank account in 2 days. I haven't even been served yet. I checked online to see whether there were any claims against me and as if Friday there weren't.

Thanks again for replying.

Please advise about the bank account. Should I switch banks? Should I wait to see whether I'm approved for loan forgiveness before filing for bankruptcy?
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Post Options Post Options   Thanks (0) Thanks(0)   Quote administrator Quote  Post ReplyReply Direct Link To This Post Posted: 23/August/2016 at 3:46am
First of all, I commend you on your efforts to deal with this loan despite all your difficulties. I admire that.

Now for some info and advice
1. Yes, change banks...  just to be on the safe side...a different account number does not protect you.  Although since the banks are not involved anymore, the wording of the loan agreement from years back probably gives them permission to go into your account.  (I think)

2. Absolutely wait for the loan forgiveness application to be processed before declaring bankruptcy.  The impact of bankruptcy lasts at least 7 years after discharge... The loans will not be automatically discharged in bankruptcy.  The govt can intervene and sometimes does, although it is unlikely in your case.   Please note that the govt moves slowly... it may take some time for them to process your application. In past years, the govt had a habit of denying applications the first time and then on appeal sometimes granting it... so if they reject it, by all means appeal!

3. Revenue Services of BC is actually a collection agency.  They are not a govt dept. They chose their name carefully, and it confuses a lot of people. Again, it is a collection agency. They have no intention of helping you, just earning a commission.

4.   It is unlikely that you will be served at all... but no guarantees on that.... I suggest just telling Rev Serv of BC that you have filed for loan forgiveness and will not discuss the matter until that application is processed.  On the other hand, many people years ago would have welcomed the opportunity to get before a judge and explain their situation... unfortunately an actual lawsuit never materialized for these people... it was just a threat to invoke fear.

Now also keep in mind that you might have both a federal and provincial loan. I'm not sure about that time frame... there were so many changes... so try to make sure you deal with BOTH your federal and provincial loans....

Keep us informed of any developments...
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