The order of events is almost always the same. You try to tap for groceries and it declines. You open the app and the balance reads a few dollars, or nothing. Somewhere in the transaction list is a line with a word like "garnishment" or "legal fee" beside it, and the amount is everything you had.
What follows is usually a day of phone calls that go nowhere, because the person on the phone at the bank did not do this and cannot undo it. The bank is a bystander here, in the legal sense, and it is required to comply. The people who can actually change the outcome are the creditor, the court, and in a few cases you, if you can show that the money in the account was money the law protects.
That last part is what almost nobody explains, so here it is in full.
The short answer
A garnishment of a bank account is a court process, not a bank decision. An ordinary creditor sues, gets a judgment, and then serves a notice of garnishment on your financial institution. The bank is the garnishee. It pays what it is holding to the court and tells you afterwards.
Some income keeps its protection after it is deposited. The Canada Pension Plan, the Old Age Security Act and the Employment Insurance Act each say that a benefit cannot be assigned, charged or attached, and the CPP and OAS both add that the benefit is exempt from seizure and execution. The Income Tax Act says the same about a Canada Child Benefit payment. Ontario's own small claims guide states plainly that employment insurance, social assistance and pension payments cannot be garnished even once the funds are deposited at a financial institution.
The bank cannot see any of that. It sees a balance. If protected income has been mixed with wages, transfers and everything else, the burden of untangling it falls on you, after the money has already moved.
Joint accounts are exposed. Ontario's guide states that where there is a co-owner, up to 50 per cent of the indebtedness, subject to an order of the court, may be garnished.
Wages are a separate process with separate rules, and those rules are provincial, not federal. British Columbia and Alberta both publish hard numbers. They are further down this page.
The Canada Revenue Agency does not use this process at all. It has its own power and does not need to sue you first.
How a bank account garnishment actually works
Take Ontario as the worked example, because the province publishes its procedure in public. A creditor who has a judgment against you can ask the court to issue a notice of garnishment. The creditor serves that notice, along with a blank garnishee's statement, on the garnishee, which is the bank, the employer, or whoever has been named. The garnishee then pays the money to the court. The clerk holds the first payment for 30 days, and after that sends a cheque to the creditor.
Three things follow from that structure, and they explain most of the confusion people have on day one.
The bank is not deciding anything
It is complying with a court document. Arguing with the branch about fairness will not move a dollar. The people to argue with are the creditor and the court.
You find out late by design
The notice is served on the institution holding your money. You are served too, but a bank can act the moment it receives the notice, and the mail is slower than that. This is why so many people discover a garnishment at a card terminal.
There is a holding period before the creditor is paid
In Ontario the clerk holds that first payment for 30 days. That window exists because other creditors can share in it, and because disputes can be raised. If you have a genuine claim that the money was exempt, it is far better to raise it inside that window than after the cheque has been sent.
Income that keeps its protection after it lands in your account
This is the part worth reading slowly. These are not guidelines or bank policies. They are sections of statutes, quoted from the official consolidated texts.
| Income | What the statute says | Source |
|---|---|---|
| CPP benefits (retirement, disability, survivor) | "A benefit shall not be assigned, charged, attached, anticipated or given as security, and any transaction purporting to assign, charge, attach, anticipate or give as security a benefit is void." A following subsection adds: "A benefit is exempt from seizure and execution, either at law or in equity." | Canada Pension Plan, section 65(1) and 65(1.1) |
| Old Age Security and the Guaranteed Income Supplement | Same wording: a benefit shall not be assigned, charged, attached, anticipated or given as security, and "A benefit is exempt from seizure and execution, either at law or in equity." | Old Age Security Act, section 36(1) and 36(1.1) |
| Employment Insurance | "Subject to subsections (2) and (3), benefits are not capable of being assigned, charged, attached, anticipated or given as security and any transaction appearing to do so is void." | Employment Insurance Act, section 42(1) |
| Canada Child Benefit | The refund "cannot be assigned, charged, attached or given as security", is not subject to any law relating to bankruptcy or insolvency, cannot be retained by deduction or set-off under the Financial Administration Act, and "is not garnishable moneys for the purposes of the Family Orders and Agreements Enforcement Assistance Act". | Income Tax Act, section 122.61(4) |
| Social assistance (provincial) | Ontario's Guide to Procedures in Small Claims Court states: "Employment insurance, social assistance and pension payments cannot be garnished, even if the funds have been deposited into an account at a financial institution." | Government of Ontario, Guide to Procedures in Small Claims Court, After judgment |
Note what the exceptions in those statutes are for. The CPP, OAS and EI carve-outs mainly let governments recover advances and welfare payments they already made you for the same period, and family support enforcement runs on its own separate track under federal legislation. None of them are a general door for an ordinary judgment creditor.
The trap nobody warns you about: mixing
Here is the scenario that ends badly even when the law is on your side. Your Employment Insurance lands in the same chequing account as the money your brother sent you for the car, plus a small pay cheque from a part-time shift, plus a tax refund. A garnishment arrives. The account had $1,840 in it. The bank sends the lot.
You are now in the position of arguing that a specific part of that $1,840 was EI. That argument is winnable, but you are making it after the money is gone, with a bank statement, on a deadline, probably without a lawyer.
Now the other version. Your EI lands in an account that holds nothing else. Every single deposit in it came from the same protected source, and one statement proves it. You are not untangling anything. You are pointing at a document.
That difference is entirely within your control and it costs nothing to arrange. It is the single most useful thing in this article.
Give protected income an account of its own
If you receive EI, social assistance, CPP, OAS or the Canada Child Benefit, having those deposits land in an account that holds nothing else turns a messy tracing argument into a one page bank statement. That only works if the second account is free, because paying a monthly fee to hold benefit money defeats the point. KOHO is a Canadian no fee prepaid Mastercard account that accepts direct deposit and e-Transfer and notifies you on every transaction, which also means you see a problem the day it starts. Be clear about the limits: this makes your exemption easy to prove, it does not make money unreachable, a creditor can serve a garnishment on any institution it can identify, and if you use a feature at any provider that lends you money then you owe that provider money too. Check the current plan terms and fees on the provider's own page before you sign up.
See how the account worksJoint accounts are exposed
People assume a joint account is half protected because half the money is someone else's. That is not how the process treats it. Ontario's guide states that where there is a co-owner, up to 50 per cent of the indebtedness, subject to an order of the court, may be garnished.
Read that from the other side of the table. If you are the co-owner who owes nothing, money you deposited is sitting inside the reach of a debt that is not yours, and getting it back means going to court to say so. This is worth thinking about before you add anyone to an account, and before you agree to be added to one, especially with a family member who is being chased by collectors. Our guide to joint bank accounts in Canada covers the rest of the trade-offs.
Wage garnishment is a different process with provincial rules
Money still with your employer and money already in your account are two different targets, and the exemptions that apply to wages are written as exemptions on wages due by an employer. Here is what two provinces publish, quoted from the legislation itself.
| Province | Wage exemption as written | Source and currency |
|---|---|---|
| British Columbia | 70 per cent of any wages due by an employer to an employee is exempt from seizure or attachment under a garnishing order, and the exemption cannot be less than $100 a month for a person without dependants or $200 a month for a person with one or more dependants. For support, alimony or maintenance enforcement the exemption drops to 50 per cent of wages up to $600 a month and 33 and one third per cent above $600, with a floor of $100 a month. A judge or registrar can vary the exemption, but not above 90 per cent of wages due. | Court Order Enforcement Act, section 3(5), 3(7) and section 4. BC Laws consolidation current to 14 July 2026. |
| Alberta | The minimum employment earnings exemption is $800 a month plus $200 per dependant, and the maximum is $2400 a month plus $200 per dependant. The exemption is calculated as the minimum plus half of the amount by which net pay exceeds that minimum, up to the maximum. The court can modify either figure on application. | Civil Enforcement Regulation, Alta Reg 276/1995, section 39(2) and Schedule 4. Office consolidation current as of 30 April 2025, with amendments up to Alta Reg 84/2025. |
| Ontario | Ontario's small claims guide states that section 7 of the Wages Act restricts the amount of wages that can be garnished, and that there are further exemptions from garnishment. We are not quoting a percentage here because we could not pull section 7 from the official e-Laws text on the day this page was written. Read the section itself, or ask a legal clinic, before relying on a number you find on a blog. | Government of Ontario, Guide to Procedures in Small Claims Court, After judgment |
The other provinces and the territories each have their own statute and their own figures. We have deliberately left them out rather than guess, because a wrong number here is worse than no number. If you want your province added, tell us and we will read the statute and publish only what it actually says.
If wages rather than a bank account are the issue, start with our guide to wage garnishment in Canada.
Registered savings can sit on the other side of the line
Retirement savings often get their own treatment, and again it is provincial. British Columbia is explicit: all property in a registered plan, defined as an RRSP, a RRIF or a deferred profit sharing plan, is exempt from any enforcement process, which the Act defines to include attachment, garnishment, execution and seizure. That protection has real limits, and they are in the same section: it does not cover property contributed to the plan after, or within 12 months before, the date the debt being enforced came due, it does not cover money that has been or is being paid out of the plan, and it does not apply to maintenance enforcement.
Two practical readings of that. First, an RRSP is generally a harder target than a chequing account, which is one more reason not to cash one out in a panic to pay a creditor. Second, the moment money leaves the plan it stops being protected, and BC's Act goes further by deeming money being paid out of a plan to be a debt due for salary or wages for enforcement purposes. Do not treat a withdrawal as a safe move without advice.
The Canada Revenue Agency does not play this game
Everything above describes an ordinary creditor: a card issuer, a collection agency that bought your debt, a landlord, a person who won a small claims case. They must sue you and win before they can touch an account.
The CRA is not in that category. It has its own statutory collection power and does not need a court judgment first, which is why a tax debt can hit an account with no lawsuit in sight. We cover that mechanism, what a requirement to pay is, and what actually stops it, in the guide to why a Canadian bank account gets frozen. Family support enforcement also runs on its own track, through provincial enforcement programs and federal legislation, and it can reach money that ordinary creditors cannot.
What to do the week it happens
1. Get the paperwork, not the story
Ask the bank for a copy of what it was served with, and get the case number, the court, the creditor's name and the amount. You cannot dispute a document you have not read. Ask for it in writing and keep the reply.
2. Work out whether the money was exempt
Pull the statement covering the deposits that were taken. If the balance was EI, social assistance, CPP, OAS or the Canada Child Benefit, you may have a real claim, and you want to make it inside the holding period rather than after the funds are released to the creditor.
3. Redirect the next deposit immediately
A garnishment can be repeated, and in some cases keeps operating. If your next benefit payment is due to land in the same account, change the deposit destination now, and keep the receiving account clean of other money.
4. Get free legal help, because this is the point where it pays
Community legal clinics and provincial legal aid services deal with garnishments constantly, and this is a narrow, procedural problem of exactly the kind they can move quickly. If the underlying judgment was obtained without you knowing about the lawsuit, say so early, because that is a separate and much stronger argument than asking for mercy.
5. Deal with the debt, not just the symptom
Protecting exempt income does not make the judgment disappear. A payment arrangement, or advice from a licensed insolvency trustee if the debt load is beyond arranging, is what actually ends the exposure. Our guide to debt relief options in Canada lays out the choices without the sales pitch.
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Common questions
An ordinary creditor, including a collection agency that bought your debt, has to get a judgment first, then have a notice of garnishment issued and served. If an agency is telling you on the phone that it will empty your account this week, ask whether it has a judgment and in which court. Collectors are also bound by provincial rules about what they may say to you, which we cover in the guide to collection agency rules in Canada.
Not necessarily. A garnishment can be issued again, and depending on the process used it can attach to money that arrives later. Do not assume a nil return is the end of it. Assume the account is known to the creditor, and plan where your next deposit lands.
The wage exemptions in provincial statutes are written as exemptions on wages due by an employer, which is why they bite at the payroll stage. Once wages have been paid into your account, the money is a balance at the bank rather than wages due, and that is a weaker position. It is one more reason to raise an exemption claim quickly and with advice rather than assuming a percentage protects you automatically.
Not much, for two separate reasons. A garnishment served on an institution can reach accounts you hold there, and your own institution has an entirely separate contractual power to move money between your accounts to pay a debt you owe it, which we explain in the guide to the right of offset. If the aim is to keep protected income cleanly separated, separating it at a different institution is the version that actually does something.
It can matter a great deal. A judgment obtained without proper service is open to challenge, and courts have procedures for setting aside a default judgment. That is a legal argument with deadlines, so it is the strongest reason on this page to talk to a community legal clinic quickly rather than reading more articles.
No, and the rules are provincial. British Columbia's Court Order Enforcement Act expressly exempts property in an RRSP, RRIF or deferred profit sharing plan from enforcement processes, with exceptions for recent contributions, money being paid out, and maintenance enforcement. A TFSA is not named in that section. Other provinces write their exemptions differently, so check your own province rather than assuming a registered account is automatically safe.
Related guides
- Why is my bank account frozen in Canada, and how do I get access back?
- Can your bank take money from your account to pay a debt? The right of offset
- Wage garnishment in Canada: how it works and how to stop it
- What being judgment proof actually means in Canada
- Debt relief options in Canada, compared honestly
- Low-cost and no-cost bank accounts in Canada
- Joint bank accounts in Canada, explained
Disclosure: Some links on this page are referral links, and Bremo may earn a commission if you open an account, at no cost to you. This does not change what we recommend. Sources, all checked on 29 July 2026: the Canada Pension Plan sections 65(1) and 65(1.1), the Old Age Security Act sections 36(1) and 36(1.1), the Employment Insurance Act section 42(1), and the Income Tax Act section 122.61(4), all quoted from the consolidated texts published by the Department of Justice on the Justice Laws website, which showed those Acts current to 14 June 2026; the Government of Ontario's Guide to Procedures in Small Claims Court, After judgment, for the statements about deposited employment insurance, social assistance and pension payments, the co-owner rule, the Wages Act reference and the garnishment procedure; British Columbia's Court Order Enforcement Act sections 3, 4 and 71.3 from the BC Laws consolidation shown as current to 14 July 2026; and Alberta's Civil Enforcement Regulation, Alta Reg 276/1995, section 39 and Schedule 4, from the Alberta King's Printer office consolidation shown as current as of 30 April 2025 with amendments up to Alta Reg 84/2025. Figures and rules change, provinces differ, and your own situation depends on facts this page cannot know. This is educational general information, not legal or financial advice.