Wage Garnishment in Canada: How to Stop It and Protect Your Income

What Is Wage Garnishment?

Wage garnishment is a legal process where a creditor deducts money directly from your paycheque to repay a debt. In Canada, most creditors must obtain a court judgment before garnishing your wages, but some — like the CRA — can garnish without going to court.

If you've received a garnishment notice, you're probably wondering how much they can take and, more importantly, how to stop it.

How Much Can Be Garnished in Canada?

The maximum garnishment amount varies by province, but generally creditors can take a significant portion of your after-tax wages:

• Ontario: Up to 20% of wages for ordinary creditors; the CRA can take up to 50%.
• British Columbia: Under the Court Order Enforcement Act, the first $3,000/month is exempt; above that, garnishment scales up.
• Alberta: Generally 30% of net income, but exemptions protect more.
• Quebec: Up to 30% of disposable income.

These limits matter because they determine how much income you'll actually receive while a garnishment is in effect — and for many Canadians, the answer is "not enough to live on."

Who Can Garnish Your Wages

Different creditors have different powers:

• Regular creditors (credit cards, personal loans) must sue you, win a judgment, and then file a garnishment order.
• The CRA can garnish without a court order by issuing a Requirement to Pay.
• Family support (child/spousal support) can garnish outside the normal limits.
• Credit unions may have a right of set-off if your paycheque is deposited into an account with them.

Legal Ways to Stop Wage Garnishment

1. File a [Consumer Proposal](/ResourceCategory?category=[Consumer Proposals](/ResourceCategory?category=Consumer Proposals))

A consumer proposal is one of the most effective ways to stop wage garnishment. The moment a Licensed Insolvency Trustee files your proposal, a legal stay of proceedings takes effect. This immediately stops:

• All garnishment (including CRA garnishment)
• Collection calls
• Bank account freezes
• Lawsuits related to the debt

A consumer proposal also lets you settle your debts for a fraction of what you owe — often 20–50 cents on the dollar — while keeping your assets.

2. File for Bankruptcy

Bankruptcy provides the same automatic stay as a consumer proposal. It stops all garnishment immediately. For someone whose income is already stretched thin by garnishment, bankruptcy can provide rapid relief and a fresh start.

The trade-off is the impact on your credit and the potential loss of non-exempt assets. A Licensed Insolvency Trustee can tell you which option fits your situation.

3. Negotiate with the Creditor

Before a judgment is entered, you can sometimes negotiate a payment plan that avoids garnishment entirely. Once a garnishment order is in place, the creditor has little incentive to negotiate — they're already getting paid. Act early.

4. Pay the Judgment

If you have the means, paying the judgment in full stops the garnishment. For most people in this situation, this isn't realistic, but it's the simplest solution if it's possible.

5. File a Statement of Affairs / Contest the Garnishment

In limited cases, you can challenge a garnishment in court — for example, if the debt isn't yours or the amount is wrong. This is rare and usually requires legal help.

Provincial Garnishment Exemptions

Each province sets exemptions that protect a portion of your income:

• Ontario: 20% of net wages can be garnished by ordinary creditors.
• Alberta: Higher exemptions protect more income, especially for low earners.
• British Columbia: The first $3,000 of monthly net income is exempt from garnishment.
• Saskatchewan & Manitoba: Provincial exemption laws limit garnishment amounts.

Knowing your provincial exemption helps you understand exactly how much a creditor can take — and whether a consumer proposal or bankruptcy would give you more breathing room.

Does Filing Stop CRA Garnishment?

Yes. Both a consumer proposal and bankruptcy stop CRA garnishment immediately. This is critical because the CRA can garnish up to 50% of your wages without a court order — among the most aggressive collection powers in Canada.

How Long Does It Take to Stop Garnishment?

Once you file a consumer proposal or bankruptcy, the stay of proceedings is immediate. Your employer will stop the garnishment as soon as they receive notice from your trustee — typically within a few days of filing.

Take Control of Your Income

Wage garnishment can make an already difficult financial situation feel impossible. The good news is that Canadian law gives you powerful tools to stop it. A Licensed Insolvency Trustee offers free consultations and can explain exactly how much you'd keep and what debts could be reduced or eliminated.