Wage Garnishment After a Judgment: How It Works in Canada

Once a judgment is registered against you in Canada, a creditor can commonly take 20% to 30% of your net wages from every single paycheque — the exact share depends on your province (Ontario's Wages Act sets 20%; British Columbia's exemption works out to roughly 30%) — more where support obligations are involved, and keep taking it until the debt, plus interest, is gone. Because judgments in most provinces can be renewed for decades, garnishment from a large liability judgment isn't a rough patch. It's a payroll deduction that can outlast your mortgage.

This page walks through the machinery: how a garnishment actually starts, what portion of your pay is reachable, what happens to bank accounts, and why being self-employed doesn't get you out of it.

How a garnishment starts (it's faster than you'd think)#

Wage garnishment isn't a lawsuit of its own. It's an enforcement step bolted onto a judgment that already exists — which means the hard part, for the creditor, is already done. The typical sequence in most provinces:

1. Judgment. A court has ordered you to pay — say, the $1.5 million left over after your insurance limit ran out in a serious injury case.
2. Paperwork, not a trial. The creditor files for a garnishment (the name varies — garnishing order, notice of garnishment) against your employer. You generally get notice, but there's no second trial. The debt is already proven.
3. Your employer is served. From that point your employer is legally required to deduct the garnished portion from each pay and remit it — to the court or the creditor, depending on the province. An employer who ignores the order can become liable for the money itself, so they don't ignore it.
4. It repeats. Wage garnishments in most provinces are continuing orders: they attach to every future paycheque until the debt is satisfied or the order is set aside.

Two things people find hard to believe. First, your consent is not part of the process at any step. Second, most provinces prohibit your employer from firing or demoting you over a garnishment — but that protection is for your job, not your money.

How much of your pay they can take#

Every province shields a portion of wages so a debtor can still eat. The size of the shield varies:

Run the arithmetic on the first row and the polite-sounding percentage stops being polite. Take-home pay of $5,000 a month at a 25% garnishment is $1,250 a month, $15,000 a year — against a $1.5 million judgment growing with post-judgment interest. That's not a repayment plan. That's a standing deduction with no finish line, which is exactly why creditors holding large judgments are content to wait.

Bank accounts: the harsher cousin#

Wage garnishment at least comes with a built-in exemption. Bank account garnishment generally doesn't. When a creditor serves a garnishment on your bank:

• The balance is captured up to the amount owing — commonly with no percentage protection, because the law treats money in an account differently from wages you haven't received yet.
• Timing is everything, and it's not on your side. A garnishment that lands the day after payday can sweep the deposit that was meant for rent. (This is why some enforcement lawyers time filings around month-end.)
• Joint accounts get complicated. Depending on the province, some or all of a joint account can be exposed to one holder's judgment — a nasty surprise for the spouse who isn't the debtor.
• Some deposits are protected — if you fight for it. Certain government benefits are commonly exempt from seizure, but once funds are mingled in an account, you may have to go to court to prove which dollars are which.

A judgment creditor with patience uses both tools in rotation: the wage garnishment as the steady drip, the bank garnishment whenever savings accumulate.

Self-employed? You're not exempt — you're just garnished differently#

The self-employed often assume garnishment can't touch them: no employer, no paycheque, no problem. The reality is closer to the opposite.

• Your receivables are garnishable. Anyone who owes you money for work — clients, customers, the general contractor above you, a platform that pays you out — can be served with a garnishment notice requiring them to pay the creditor instead of you.
• The wage exemption often doesn't apply. The 20–30% shield exists to protect wages. A client's payment on your invoice frequently isn't wages in the eyes of the law, so the creditor may capture the whole amount.
• It's a reputation weapon. Every garnishment notice tells a client that you carry an unpaid judgment. For a consultant, contractor, or professional, the collection damage can be smaller than the credibility damage.
• Incorporation helps less than people hope. Paying yourself through a corporation adds steps, but salary or dividends flowing to you personally are reachable once paid, your shares in the corporation are themselves an asset, and a debtor examination — where you disclose your finances under oath — will map the structure quickly.

How long this can go on#

The honest answer: as long as the creditor stays organized. In most provinces a judgment can be renewed before it expires, again and again, with post-judgment interest accruing throughout. A creditor holding a multi-million-dollar judgment has every incentive to renew — the debt is growing faster than your garnished wages are paying it down.

This is the part that separates a liability judgment from ordinary debt trouble. A credit card balance is finite; you can see the end from the beginning. A $1.5 million shortfall garnished at $15,000 a year, compounding against you, has no visible end. It follows careers, survives job changes (the creditor simply serves the new employer), and — as we cover in the companion piece on being sued for more than your insurance covers — negligence judgments aren't reliably erased by bankruptcy either.

The only clean exit is never owing the money#

Notice what's missing from everything above: any good option after judgment. Once the order exists, the choices are pay, negotiate from weakness, or be collected from — for decades if necessary.

The entire game is therefore played before the judgment, and it's won with a bigger number on one line of your insurance. Canadian courts have awarded roughly $18.4 million (MacNeil v. Bryan, Ontario, 2009) and $12.3 million (Morrison v. Greig, 2007) against ordinary drivers. Against awards like those, the difference between a $1 million limit and a $5 million limit is the difference between a garnishment order with your name on it and a claim your insurer simply pays.

The pricing makes the decision almost unfair: a personal umbrella policy typically adds $1 million of protection for roughly $200–$300 per year, and about $50–$75 per year for each additional million — estimates based on typical Canadian broker pricing, not quotes. Call it $30 a month to make the word "garnishment" permanently irrelevant to your payroll.