Updated: April 2025  |  bremo.io financial guides

Wage Garnishment in Canada: How It Works and How to Stop It

Wage garnishment is one of the most financially disruptive actions a creditor can take — money is deducted directly from your paycheque before you receive it. If you are facing garnishment or worried it may happen, understanding the process and your options is essential.

How Wage Garnishment Works in Canada

In most cases, a private creditor (bank, credit card company, collection agency) cannot garnish your wages without first:

1. Suing you in civil court
2. Obtaining a court judgment against you
3. Registering the judgment and applying for a garnishment order
4. Serving the garnishment order on your employer

Once served, your employer is legally required to deduct the specified amount from your wages and remit it to the court or creditor. This process can take several months from the initial lawsuit to the first garnishment.

Exceptions: Who Can Garnish Without a Court Order

Two entities in Canada can garnish wages without first going through the civil courts:

• Canada Revenue Agency (CRA): CRA can issue a requirement to pay directly to your employer under the Income Tax Act and other federal statutes. No court order is required.
• Maintenance enforcement programs: Agencies enforcing child support and spousal support arrears have administrative garnishment powers in all provinces.

How Much Can Be Garnished?

Provincial law limits the amount that can be garnished from your wages. Limits vary significantly:

• Ontario: Up to 20% of net wages (after deductions)
• British Columbia: 30% of net wages exceeding the minimum exemption amount
• Alberta: Based on a sliding scale tied to income; a basic amount is always protected
• Quebec: 30% of net wages after the first ~$200/week is protected
• Manitoba: 30% of net wages above the exemption amount

These limits apply to a single garnishment. If you have multiple garnishments (e.g., student loans and a credit card judgment), the total may still be subject to the provincial cap.

How to Stop a Wage Garnishment

Option 1: Pay the Debt in Full

The most direct solution. If you can pay the outstanding judgment, the garnishment order is discharged and your employer is notified to stop deductions.

Option 2: Negotiate a Repayment Agreement

Contact the creditor or their lawyer and negotiate a voluntary repayment plan. If they agree to accept regular payments, they may agree to suspend the garnishment while you're paying as agreed.

Option 3: File a Consumer Proposal

A consumer proposal filed with a Licensed Insolvency Trustee triggers an immediate stay of proceedings. The moment the proposal is filed, the garnishment must legally stop — your employer is notified and deductions cease. The proposal then addresses the underlying debt.

Option 4: File for Bankruptcy

Bankruptcy also triggers an immediate stay of proceedings, stopping wage garnishment. As with a consumer proposal, your employer receives legal notice that the garnishment is stayed.

Option 5: Challenge the Garnishment

If you believe the underlying judgment was obtained improperly, or if the garnishment exceeds the provincial limits, you can apply to court to challenge it. Legal advice is recommended for this route.

Notice to Your Employer

Many people worry that their employer finding out about a garnishment will damage their employment. While it is awkward, employers are prohibited from terminating or penalizing employees solely because of a garnishment order in most provinces. The employer is simply a conduit required to comply with the court order — they are not permitted to discriminate on that basis.

Garnishment of Bank Accounts

In addition to wages, creditors can also freeze and seize funds in your bank account through a process called bank account garnishment. This works similarly — a court judgment is required first (with the same CRA exception). A stay of proceedings from a consumer proposal or bankruptcy stops bank account garnishments as well.