How to Stop Wage Garnishment in Canada

Written by: A Licensed Insolvency Trustee

A creditor can garnish wages to collect a debt in most parts of Canada. The only exception to the standard creditor is in New Brunswick, where creditors are not able to garnish wages. A wage garnishment is a very common method that can be employed by anyone who is lawfully owed money. However, a garnishee can be stopped.

How to stop a creditor from garnishing wages

It makes no difference if your creditor is threatening to garnish your wages, has set a date to make a court application or served a garnishment order on your employer. You still have options.

The ways you can put a stop to a garnishee are:

  1. Quit your job so there is no income to garnish.
  2. Negotiate repayment terms with your creditor and have them agree to remove the garnishee.
  3. Obtain a loan to pay off the garnisheeing creditor in full.
  4. File with orderly payment of debts (where available).
  5. File a consumer proposal.
  6. File personal bankruptcy.

If you are about to be garnished, or if you have already been garnished, both a personal bankruptcy and a consumer proposal can put an immediate stop to this garnishee.

They both have an immediate stay of proceedings – this is court protection, that is put in place the moment that you sign the documents and will put a stop to the garnishment.

However, timing is key, the sooner the court protection is in place, the sooner you will be able to ensure the garnishee won’t continue.

What is a Wage Garnishment?

A wage garnishment is a legal proceeding that allows a creditor to seize money directly from your pay cheque, before you get paid.

Here is an example:

Ryan has a small family of four. His wife stays home with the kids, and Ryan works in a manufacturing facility. He has worked at the same job for the last 5 years and brings home $2175 after tax every two weeks. Unfortunately, Ryan has a few credit cards that are delinquent. In fact he hasn’t made a payment on any of these credit cards in the last 6 months. Today at work, Ryan’s boss called him into the office to warn him that they had received a Garnishment Order from one of these credit card companies. What this means is that instead of receiving $2175, this pay cheque will only receive $1,522.50 and the rest will be sent straight to the credit card company. This is 30% less than normal, and this will continue until Ryan’s credit card is paid in full.

While a creditor won’t start a garnishee the moment you miss a payment, after a period of non-payment and after trying to talk to you on the phone to work out some type of arrangement that is acceptable to both you and the creditor, most creditors will turn to the court for assistance and look to start garnishing wages.

Can a collection agency garnish my wages in Canada?

Yes, collection agencies can enforce collection through a wage garnishment.

What does a creditor have to do to garnish my wages?

The specific rules relating to the timeline and method of garnishment are based on provincial legislati