Wage Garnishment in Canada
Are you facing a wage garnishment? You don’t have to navigate it alone — we can help stop it.
A wage garnishment happens when a creditor takes legal action to deduct money directly from your paycheque to recover an unpaid debt. It’s stressful, but there’s good news: a wage garnishment can be stopped. If you’re being threatened with one — or it has already started — talk to a Licensed Insolvency Trustee (LIT) at Spergel today.
We’ll help you understand your rights, explore your options, and take immediate steps to stop wage garnishment in Ontario or anywhere in Canada.
What Is Wage Garnishment in Canada?
Wage garnishment is a legal order that allows a creditor to collect unpaid debts by deducting a portion of your wages directly from your employer. This can happen if you’re behind on:
- Credit card payments
- Payday loans
- Income taxes
- Child or spousal support
- Other personal debts
Before your wages can be garnished, a creditor must typically obtain a court order, although CRA (Canada Revenue Agency) has special powers and may garnish your wages without going to court.
In Ontario, for example, you’ll usually receive a Statement of Claim and have 21 days to respond. Ignoring it could result in automatic garnishment.
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A consumer proposal can reduce your total debt by up to 80% and put an end to wage garnishment.
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Our findings confirm that constant stress from overdue bills, mounting interest, and relentless collection actions can lead to anxiety, depression, and even physical health problems.
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Who Can Garnish Your Wages?
In Canada, wage garnishment can be requested by:
Credit card companies
Debt collection agencies
Payday lenders
The CRA (Canada Revenue Agency)
Provincial or federal courts
Each of these creditors can garnish your wages up to the legal limit, depending on the type of debt. CRA garnishments are often the most aggressive and difficult to negotiate without professional help.
How Much Can Be Taken from Your Wages?
20% of your Gross Wage Can Go Towards Your Debts, or up to 50% for Child Support.
The most a creditor can garnish from your wages under the Ontario Wages Act is 20% of your gross wage to pay towards debts, or up to 50% for child support. It is a good idea to try and negotiate with your creditor before your employer receives a wage garnishment order to prevent this deduction from your paycheque.
What Happens When Wage Garnishment Starts?
Once your employer receives a legal garnishment order, they must deduct money from your pay until:
- The debt is paid off
- The court order is withdrawn
- You take legal steps to stop it
You’ll continue receiving a reduced paycheque until action is taken. Wage garnishment won’t stop on its own, but you can stop it with the right help.
Take the First Step Toward Ending Wage Garnishment
You don’t have to lose another paycheque. Let’s talk about how to stop wage garnishment and protect your income. Book your free consultation today.
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How to Stop Wage Garnishment
There are two legal debt relief options that can stop wage garnishment in Canada immediately, including from institutions like banks, credit card companies, payday loan companies, and even the Canada Revenue Agency (CRA): a Consumer Proposal or Personal Bankruptcy.
Consumer Proposal
A consumer proposal is a formal agreement to settle your debts for less than you owe, often up to 80% less.
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It’s filed by a Licensed Insolvency Trustee and provides legal protection from creditors. That includes stopping all wage garnishment, interest, collection calls, and lawsuits. With a consumer proposal, you keep your assets and make one affordable monthly payment. It’s one of the most effective tools for stopping wage garnishment in Ontario.
Personal Bankruptcy
If a proposal isn’t right for your situation, personal bankruptcy, while often a last resort, may be the best way forward.
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It eliminates most unsecured debt and triggers a stay of proceedings, which immediately halts wage garnishment, collection calls, and legal action. Bankruptcy offers a chance to reset and start fresh — and it’s often faster and more affordable than people think.
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Every financial story is different, and so is the right solution. Talk to a Spergel debt help expert and get a clear, personalized plan to stop wage garnishment and move forward. Let’s get started together.
What Real Canadians Are Saying
Hear from people who stopped the calls, ended the garnishments, and finally found peace of mind.
where to start
What’s the First Step to Stopping Wage Garnishment?
The first step is to speak to a Licensed Insolvency Trustee. LITs are the only professionals legally authorized to file a proposal or bankruptcy, and those are the only guaranteed ways to stop wage garnishment fast.
At Spergel, we’ve helped thousands of Canadians break free from wage garnishments and take back control of their income. We’ll review your situation with care, compassion, and zero judgment.
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General faq
Frequently Asked Questions About Wage Garnishment in Canada
How much of my wages can be garnished in Ontario?
In Ontario, the most a creditor can legally garnish is 20% of your gross wages, or up to 50% for child or spousal support. This deduction comes directly from your paycheque and continues until the debt is repaid, unless legal action is taken to stop it.
Can the CRA garnish my wages without going to court?
Yes. The Canada Revenue Agency (CRA) has special powers that allow it to garnish your wages without a court order. That’s why CRA wage garnishments can happen quickly, and why it’s important to seek professional help as soon as you receive a notice or threat of garnishment.
Will my employer be notified if my wages are garnished?
Yes. Once a wage garnishment is in effect, your employer will receive a legal garnishment order and is required by law to deduct a portion of your pay. While this can feel embarrassing, you’re not alone, and there are ways to stop the garnishment and regain your financial privacy.
Can I stop a wage garnishment after it starts?
Absolutely. The most effective way to stop wage garnishment in Canada is by filing a consumer proposal or bankruptcy with a Licensed Insolvency Trustee. Once filed, a legal “stay of proceedings” takes effect, which immediately halts all garnishments and collection activity.
What happens if I ignore a wage garnishment?
Ignoring a wage garnishment won’t make it go away; in fact, it could get worse. You’ll continue losing a portion of your income, and interest may still accumulate. Taking action early by speaking with a Licensed Insolvency Trustee can protect your income and give you back control of your finances.
Real Canadians. Real Success — Like Eric
Credit card collection calls were causing Eric stress and wouldn’t stop, so he decided to get help. He was close to signing what he called a “debt collection settlement”. Eric had found a lender to borrow enough from to pay off his collection debts. A close friend told him he was crazy to agree to the proposed repayment interest of 30% and Eric decided to call a Licensed Insolvency Trustee instead to help him find a better option.
Eric's story is just one of many
Discover more of our Success Stories of Canadians just like you, or reach out to us so we can help you become debt-free sooner.
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