Wage garnishment is one of the most stressful debt collection tools a creditor can use — it means money is taken directly from your paycheque before it reaches you. In Canada, most creditors must obtain a court judgment before they can garnish wages, but there are important exceptions (including the CRA, which has special powers). This guide explains how garnishment works, what limits apply, and — critically — how to stop it.
For most unsecured creditors (credit card companies, banks, collection agencies), the process to garnish wages is:
This process typically takes several months from when the creditor first decides to sue. You will receive court documents throughout the process — don't ignore them.
The Canada Revenue Agency (CRA) has the legal authority to garnish wages, bank accounts, and accounts receivable without obtaining a court judgment first. Under the Income Tax Act, the CRA can issue a Requirement to Pay directly to your employer or bank. This is one of the most powerful collection tools in Canada and one of the best reasons to address CRA debt proactively.
Support enforcement agencies (for child support and alimony) also have statutory authority to garnish wages without a separate court action — support orders are self-enforcing through provincial support enforcement programs.
Each province sets limits on how much of your wages can be garnished. Common rules:
CRA garnishments are not bound by these provincial maximums — the CRA can garnish 10000% of wages in extreme cases, though this is rare for employment income.
This is the fastest and most reliable way to stop a wage garnishment. Under the BIA, filing triggers an automatic stay of proceedings that stops most collection actions including wage garnishments — usually within 24–48 hours of filing. Your LIT notifies your employer directly.
Paying the judgment debt in full, including any court costs added to the judgment, will result in the creditor releasing the garnishment.
Some creditors will agree to release a garnishment if you enter a formal payment agreement. This is not guaranteed — they have no legal obligation to agree — but is worth attempting, especially if the garnishment amount is creating genuine hardship.
If the garnishment was issued incorrectly — wrong court, wrong province, incorrect amounts — you can challenge it in court. You'll need a lawyer for this. It doesn't address the underlying debt, only the procedural validity of the garnishment itself.
Employers are legally required to comply with garnishment orders. It is illegal in Canada for an employer to fire an employee solely because of a wage garnishment. However, receiving multiple garnishments can complicate the employment relationship — this is another reason to address the underlying debt proactively.
In addition to wages, creditors who have obtained a judgment can also garnish (freeze and seize funds from) your bank account. The same process applies: a garnishment order served on your bank. The bank is obligated to comply immediately, which can mean your account is frozen without prior notice to you. A consumer proposal or bankruptcy filing stops bank garnishments as well.
If you are facing garnishment or have received a court judgment, the most important step is to contact a Licensed Insolvency Trustee for a free consultation immediately. They can file a consumer proposal or bankruptcy quickly, stopping the garnishment and giving you a path forward to address the underlying debt.
Regardless of your credit history, KOHO is available to all Canadians. No monthly fees, no minimum balance, no credit check to open. Use code 45ET55JSYA for a bonus when you sign up.
Open KOHO Free — Code 45ET55JSYA