Wage Garnishing: Know Your Rights

When it comes to financial matters, one of the most daunting prospects individuals may face is wage garnishing. It’s a legal process wherein a portion of someone’s income is withheld by their employer to pay off their debts. This process is not just financially stressful, but it can also lead to embarrassment and potential damage to one’s professional reputation.

This article aims to shed light on the intricacies of wage garnishing, the rights of individuals facing this situation, and the possible ways to halt this process.

Understanding Wage Garnishing

When a person fails to pay their debts, taxes, or child support, their creditors have the right to seek legal recourse. This is often done through the process of wage garnishing.

To initiate wage garnishing, creditors must first validate the debt through court proceedings. If successful, the court issues a garnishment order, which is then sent to the debtor’s employer. Upon receipt, the employer is legally obligated to withhold a specified portion of the employee’s wages, to be paid directly to the creditor.

Who Can Initiate Wage Garnishing?

In Canada, your wages can be garnished for various types of unpaid debt, including tax debts, student loans, outstanding bill payments, and bank loans. However, the process differs based on the type of creditor.

For instance, a Credit Union to which you’ve given an assignment of wages or a payday loan company where you’ve signed a voluntary wage assignment can bypass the court proceedings. Even the Canada Revenue Agency is granted the ability to garnish wages without a court order.

Key Aspects of Wage Garnishing in Ontario

If you’re in Ontario and have received a notice of wage garnishing, here are some crucial points to note:

How Much Can Be Garnished?

As per the Ontario Wages Act, creditors can garnish up to 20% of your income. However, in the case of child support, this number can rise to 50%. The exact amount is determined by the court, based on your financial situation and any other garnishments currently in effect.

Can Employers Terminate Employment Due to Wage Garnishing?

The law protects employees from losing their jobs due to wage garnishing. Employers cannot fire or demote an employee if they receive a garnishing order.

Can Collection Agencies or Payday Loan Companies Garnish Wages?

Collection agencies can indeed garnish your wages. However, they must first obtain a judgement order by suing you for the unpaid debt.

As for payday loan companies, they can garnish your wages if you’ve signed a voluntary payroll deduction form. However, this arrangement differs from a legal garnishment order, as you have the right to revoke your permission at any time.

Is It Possible To Stop Wage Garnishing?

Stopping wage garnishing independently is challenging. Unless the debt is paid off or the creditor agrees to stop the garnishing, the process continues. However, there are legal methods available, such as filing for bankruptcy or a consumer proposal, which can halt the garnishment.

How Bankruptcy Helps Stop Wage Garnishing

Both bankruptcy and consumer proposals can stop a garnishment order, except for those related to unpaid child or spousal support. These legal processes provide a stay of proceedings, which halts all creditor actions, including wage garnishing.

The key is to act promptly. Remember, the longer the delay in addressing wage garnishment, the more money you lose.

Seeking Professional Help

Working with professionals like Bankruptcy Canada can expedite the process of stopping wage garnishment. They can have a court order sent to your employer within hours, helping you retain more of your hard-earned money.


Facing wage garnishing is undoubtedly stressful. However, knowing your rights can help you navigate this challenging situation and find feasible solutions.

If you’re threatened with a wage garnishment or already undergoing this process, don’t hesitate to seek professional help. They can provide you with a free, no-obligation debt consultation and help you explore your options.

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