Wage garnishment in Canada: Know your options

If your pay is already being garnished, or you have just been told it is about to be, here is the part that matters most: it is not permanent, and you have options.

The fastest way to stop a wage garnishment in Canada is to file a consumer proposal or a bankruptcy through a Licensed Insolvency Trustee. Both put an immediate stay of proceedings in place under the Bankruptcy and Insolvency Act, which legally requires your employer to stop redirecting your pay, even when the money is owed to the Canada Revenue Agency. You can also try to negotiate directly with the creditor or ask the court to lower the amount, though neither of those carries the same legal protection as a  Stay of Proceedings which takes effect when you file a consumer proposal.

Debt is rarely just about numbers. It wears on your sleep, your confidence, and your sense of control. If a garnishment has you feeling cornered, you are not alone: thousands of Canadians deal with this every year, and there is a clear way back. The rest of this guide covers why garnishment happens, how much of your pay is actually protected (it is more than most people expect), what your rights are, and exactly how to stop it.

What is wage garnishment?

A wage garnishment is a legal instruction that forces your employer to send part of your pay straight to a creditor before it ever reaches you. You might hear it described as having your salary garnished, a paycheque garnishment, or money being garnished off your cheque. The mechanics are the same either way: a portion of each cheque is redirected until the debt is paid or the garnishment is stopped.

For most debts, a creditor has to sue you, win a judgment, and then obtain a garnishment order from the court before any of this can start. There are important exceptions, covered below, where no court order is needed at all.

Why might your wages be garnished?

A handful of situations account for nearly every garnishment:

• Unpaid debt. Credit cards, loans, and lines of credit are the most common trigger, usually after a creditor has won a court judgment.
• Unpaid taxes. If you owe the Canada Revenue Agency, it can garnish your pay, often for a larger share than a regular creditor, and without going to court.
• Child or spousal support. Support enforcement can take more than 50% of your pay, and unlike most debts, it cannot be paused by filing for a consumer proposal or bankruptcy.
• Defaulted student loans. Government student loans in default can lead to wage garnishment.

Can the CRA garnish your wages without going to court?

Yes, and this is the part that catches people off guard. Most creditors have to sue you first. The Canada Revenue Agency does not. Under section 224 of the Income Tax Act, the CRA can send a document called a Requirement to Pay directly to your employer, and your employer is legally obligated to comply right away.

The CRA’s reach is also wider than a normal creditor’s. It can redirect up to 50% of an employee’s pay, and for self-employed people and contractors it can claim up to 100% of what is payable to you. It can also pursue your bank account and contract payments. Because there is no court step, a CRA garnishment can land fast, which is why it is worth getting advice the moment you receive a notice, or even a warning. The good news: a consumer proposal or bankruptcy can stop a CRA garnishment too, when the tax debt is included in the filing.

How much of your wages can be garnished? Exemptions by province

This is the question almost everyone asks, and the answer depends on where you live, because each province and territory protects a different portion of your income. The figures below are current as of July 2026. Because they change from time to time, confirm the latest amount for your province or territory, or speak with a Licensed Insolvency Trustee, before relying on a specific number.

It’s worth noting that Quebec calculates garnishment on gross rather than net pay. And all of the above are subject to the court’s discretion, with support-enforcement garnishments (such as child or spousal support) often following different, higher limits than the consumer-debt figures shown here.

What about self-employed income, bank accounts, and protected income?

A few situations sit outside the standard provincial and territorial rules:

• Self-employed and contract income. Provincial wage exemptions generally do not apply, as these are accounts receivable and not wages, so up to 100% of what is payable to you can be seized, particularly by the CRA.
• Bank accounts. Judgment creditors and the CRA can also garnish your bank account. In addition, if you owe money to the bank where you currently bank, it can apply its right of offset and seize funds in your account to apply against what you owe it.
• Protected income. Certain income is shielded from court-order garnishment, such as social assistance, government pension income, disability benefits, and EI benefits. However, these benefits may still be subject to the right of offset if they have been overpaid.

Your rights during wage garnishment

Canadian law makes sure a garnishment does not leave you with nothing. You have rights in this situation, including:

• Notice. You must be told about the garnishment, the amount of the debt, and how to dispute it before your employer is brought in.
• Protected income. A portion of your pay is always exempt to cover living costs, with the amount set by your province or territory (see the table above).
• The right to challenge it. If the garnishment is excessive or you believe it is unfair, you can dispute it in court and ask a judge to reduce it.
• Job protection. Your employer cannot fire you because your wages are being garnished.

How to stop or prevent wage garnishment

Whether a garnishment has already started or you can see one coming, you have a few options. They are not equal, and timing matters.

1. Negotiate with the creditor. It is far easier to prevent a garnishment than to unwind one. Talking to your creditor early and offering a realistic repayment plan can sometimes keep it from happening at all. Honesty, and a plan you can actually stick to, go a long way toward rebuilding trust.
2. Ask the court to reduce it. If the garnishment leaves you unable to cover basic needs, you can file a motion asking the court to lower the amount.
3. File a consumer proposal or bankruptcy. This is the route with real legal force. Both can only be filed by a Licensed Insolvency Trustee, and both create an immediate stay of proceedings under the Bankruptcy and Insolvency Act that stops the garnishment as soon as the filing is in place.

• • Consumer proposal: a legally binding agreement that lets you settle your debts for less than you owe and make one manageable monthly payment over a set term.
  • Bankruptcy: eliminates most unsecured debts and requires a monthly payment based on your income, along with a series of duties to be completed within a set period.

One caution: the stay cannot stop support enforcement (child or spousal support), and it does not cover secured debts like a mortgage or car loan.

How long does a garnishment last, and does it affect your credit?

A garnishment generally continues until the debt is paid off or it has been stopped through one of the routes above. The garnishment itself is not a separate mark on your credit report, but the things around it (the missed payments, the court judgment, or an insolvency filing) do affect your credit. The sooner you resolve the underlying debt, the sooner you can start rebuilding.

Why acting early matters

Every dollar that gets garnished is a dollar you cannot put toward rent, groceries, or paying the debt down on your own terms. The longer a garnishment runs, the harder it is to keep up with everything else, and the longer your credit takes to recover. Garnishment can feel overwhelming, but it is not permanent. Understanding your rights, knowing your options, and getting advice early are what put you back in control.

Frequently asked questions

Can the CRA garnish my wages without a court order?

Yes. Under section 224 of the Income Tax Act, the CRA can issue a Requirement to Pay directly to your employer without suing you first.

Will my employer be told about the garnishment?

Yes. Once a garnishment is in effect, your employer receives the order or requirement to pay and is legally required to deduct part of your pay. It can feel embarrassing, but your employer cannot fire you for it.

Can I be fired because my wages are garnished?

No. Job protection is one of your rights. An employer is not allowed to end your employment because of a garnishment.

Can a consumer proposal or bankruptcy stop a garnishment immediately?

In most cases, yes. Both put a stay of proceedings in place under the Bankruptcy and Insolvency Act the moment you file, which legally stops the garnishment, including CRA garnishments. Support enforcement is the main exception.

Can my bank account be garnished too?

It can. Judgment creditors and the CRA can reach money in your bank account, and your bank may apply funds against debts you owe it directly under its right to offset.

How much of my pay can be garnished?

It depends on your province or territory. Protections range from roughly 70% to 80% of wages across much of the country, with higher limits for support enforcement and CRA debts. See the provincial and territorial table above.

You do not have to face this alone

A wage garnishment can feel like the floor has dropped out, but it is a problem with a solution. A Licensed Insolvency Trustee can look at your full financial situation, explain which options fit, and, if a consumer proposal or bankruptcy is the right move, stop the garnishment quickly.

Connect with Bromwich+Smith for a free consultation. No judgment, just a clear look at where you stand and how to take back control of your financial story.

Sources

• Ontario Wages Act, RSO 1990, c W.1, s. 7
• Alberta Civil Enforcement Act and Civil Enforcement Regulation
• British Columbia Court Order Enforcement Act
• Manitoba The Garnishment Act, CCSM c G20
• Saskatchewan Enforcement of Money Judgments Act
• Quebec Code of Civil Procedure, art. 698
• Nova Scotia Civil Procedure Rule 79.08
• New Brunswick Enforcement of Money Judgments Act, SNB 2013, c 23
• Prince Edward Island Judgment and Execution Act
• Newfoundland & Labrador Judgment Enforcement Act
• Yukon: general territorial garnishment rules; Income Exempt from Garnishment Regulation (2025) under the Maintenance Enforcement Act (support enforcement, first $16,000/year); Rogers v. Maintenance Enforcement Program (Yukon Court of Appeal, 2025)
• Northwest Territories and Nunavut territorial garnishment rules (confirm exact statute and citation)
• Income Tax Act, s. 224 (CRA Requirement to Pay); Canada Revenue Agency collection policy (canada.ca)
• Bankruptcy and Insolvency Act (stay of proceedings); Office of the Superintendent of Bankruptcy