Can a collection agency garnish your wages in Canada?
In short
A collection agency generally cannot garnish your wages on its own. A creditor usually has to sue you and obtain a court judgment first, then apply separately for a garnishment order. The rules on how much can be taken and what is protected are set by each province and differ between them. This is general information, not legal advice.
Updated
Can a collection agency garnish your wages without going to court first?
For an ordinary unsecured debt like a credit card, a personal loan or a line of credit, no. A collection agency holds no independent power to reach into your paycheque. What it can do is call, write, and eventually refer the account to a lawyer to sue you — garnishment only becomes possible after that lawsuit produces a court judgment against you.
This is a meaningful gap between the fear a garnishment threat is meant to create and what a collection call can actually do on its own. A demand letter or a phone call is not a court order, and it does not authorize anyone to take money out of your pay.
What has to happen before a creditor can actually garnish your wages?
The general sequence has two separate stages. First, the creditor has to sue you in civil court and win, or you have to fail to respond and a default judgment is entered against you. A judgment is a formal court decision that you owe a specific amount — it does not, by itself, take any money.
Second, once the judgment exists, the creditor has to apply separately — through the provincial court process where you live or work — for a garnishment order directed at your employer. Only after that second step is granted does an employer become legally required to withhold anything from your pay and send it to the court or the creditor.
Who decides how much can be taken, and what is protected?
Garnishment is provincial and territorial law, not a single national rule. Each province sets its own procedure for how a garnishment order is obtained and served, its own approach to what portion of income can be reached, and its own list of income types that are wholly or partly protected. This page does not state a figure for any of that, because the details differ by province and by the source of the income, and the wrong number here would be actively misleading rather than simply incomplete.
What to ask, instead of guessing at a number
If you have been served with a garnishment notice, ask your provincial court office or a lawyer what protection applies to your specific pay and where the current figures are published — those figures change and belong at the source, not repeated on a general guide.
What does the process generally look like from start to finish?
Every case runs on its own timeline and through its own court, so treat the sequence below as a general shape rather than a schedule.
The general sequence
- 01
A claim is filed against you
The creditor, usually through a lawyer, files a claim in civil court for the amount it says you owe.
- 02
The court issues a judgment
If the claim succeeds, or you do not respond in time, the court enters a judgment confirming the debt and the amount.
- 03
The creditor applies to garnish
Holding a judgment, the creditor applies through the applicable provincial process for an order directed at your employer.
- 04
The order is served on your employer
Once granted and served, the order legally requires your employer to withhold and remit an amount from each pay.
- 05
You can still ask about your options
At any stage — before or after a judgment — a Licensed Insolvency Trustee can review your unsecured debts with you at no cost for the first meeting.
How does wage garnishment compare with a consumer proposal or bankruptcy?
These are not competing products — they sit in different parts of the same problem. Garnishment is a creditor-driven court process aimed at a single debt; a consumer proposal or bankruptcy is a federal process that deals with your unsecured debts as a group, through a Licensed Insolvency Trustee.
Garnishment versus a federal insolvency filing
| Wage garnishment | Consumer proposal or bankruptcy | ||
|---|---|---|---|
| Who runs the process | The creditor, through the provincial courts | You, through a Licensed Insolvency Trustee, under the federal Bankruptcy and Insolvency Act | |
| Scope | One judgment debt | Your unsecured debts as a group | |
| Requires a court judgment first | Yes, generally | No — a trustee can act whether or not any creditor has sued you | |
| Who can start it | The creditor | You |
Who runs the process
- Wage garnishment
- The creditor, through the provincial courts
- Consumer proposal or bankruptcy
- You, through a Licensed Insolvency Trustee, under the federal Bankruptcy and Insolvency Act
Scope
- Wage garnishment
- One judgment debt
- Consumer proposal or bankruptcy
- Your unsecured debts as a group
Requires a court judgment first
- Wage garnishment
- Yes, generally
- Consumer proposal or bankruptcy
- No — a trustee can act whether or not any creditor has sued you
Who can start it
- Wage garnishment
- The creditor
- Consumer proposal or bankruptcy
- You
Filing through a Licensed Insolvency Trustee generally affects a creditor's ability to continue certain collection actions on the debts it covers. A trustee can explain exactly what happens to an active garnishment in your specific situation — this varies by case and is not something a general guide can state as a rule.
Does a limitation period stop a creditor from suing you at all?
Every province and territory sets a deadline for starting a court claim on an ordinary unsecured debt, and once it has passed a lawsuit can generally be dismissed on that basis. Our separate guide on the statute of limitations on debt sets out the periods that are currently verified province by province, and how that clock differs from a court judgment that already exists.
What does a wage garnishment do to your credit file?
A garnishment itself generally does not appear as its own separate line on a credit report — what shows up is the underlying account going unpaid, and any court judgment associated with it. The Financial Consumer Agency of Canada describes late or unpaid credit cards and loans as staying on file for up to six years, which is the same clock that applies whether or not the debt was ever garnished.
If the same debt is later resolved through a consumer proposal, that filing carries its own reporting timeline — generally three years after all the debts included in it are paid off, or six years after signing, whichever comes first.
Can a garnishment be stopped once it has started?
Options exist and which one fits depends entirely on your situation, your province, and the stage the case is at. Paying the judgment in full, arranging directly with the creditor, challenging the underlying judgment, or filing a consumer proposal or bankruptcy through a Licensed Insolvency Trustee are all things that can be relevant — whether any of them applies to your case depends on the details, and a trustee or a lawyer is the right person to say which does.
Frequently asked questions
- Can the Canada Revenue Agency garnish my wages without suing me first?
- The Canada Revenue Agency has its own collection powers for tax debt that are separate from the ordinary creditor-sues-then-garnishes sequence described on this page. See our guide on CRA tax debt options, or speak with the CRA directly about a specific balance.
- Is any of my income protected from garnishment?
- Provinces generally treat some types of income differently from ordinary wages, but exactly what is protected and by how much is set out in provincial rules that this page does not restate, because they vary. A lawyer or your provincial court office can confirm what applies to your specific income.
- Can more than one creditor garnish my wages at the same time?
- Provincial rules generally address how multiple garnishing creditors are handled against the same pay, including priority between them. The specifics differ by province, so this is a question to bring to your provincial court office or a lawyer rather than assume from a general guide.
- Does my employer have to comply with a garnishment order?
- A garnishment order that has been properly issued and served is a legal requirement on the employer named in it, not an optional request. What happens if an employer does not comply is set out in provincial procedure and is outside the scope of this page.
- Can I negotiate with the creditor before it gets to a court judgment?
- A creditor is generally free to discuss a payment arrangement with you directly at any point, including before filing a claim, and a licensed debt-settlement company may also negotiate on your behalf. What a payment plan looks like depends entirely on what the creditor is willing to accept.
- Will filing a consumer proposal stop an existing garnishment?
- This depends on the specifics of your case, including which court issued the garnishment and what debt it relates to. A Licensed Insolvency Trustee can review your situation and explain exactly what a filing would and would not change for an existing order.