Debt Collection & Garnishment in Ontario: Know Your Rights

What Collection Agencies Can and Cannot Do

Ontario's Collection and Debt Settlement Services Act (CDSSA) prohibits collectors from:

• Contacting you more than 3 times in a 7-day period (after first contact)
• Contacting you on Sundays before 1 PM or after 5 PM, or on Sundays at all for some contacts
• Calling before 7 AM or after 9 PM on weekdays/Saturdays
• Using threatening, profane, or intimidating language
• Contacting your employer except to confirm employment or garnish wages with a court order
• Contacting family members except a co-signer or guarantor
• Misrepresenting the amount owed or their authority

If a collector violates these rules, file a complaint with the Ministry of Public and Business Service Delivery and document every call.

Can a Creditor Garnish My Wages Without a Court Order?

No. In Ontario, a creditor cannot garnish your wages, bank account, or any other asset without first obtaining a judgment from a court. The process is:

1. Creditor files a claim in Small Claims Court (up to $35,000) or Superior Court.
2. You receive a Statement of Claim — you have 20 days (Small Claims) or 30 days (Superior Court) to defend.
3. If you don't defend, the creditor gets a default judgment automatically.
4. With a judgment, the creditor files a Notice of Garnishment targeting your employer or bank.

Wage Garnishment Limits (Ontario)

Under the Wages Act, creditors can only garnish 20% of your net wages. Your employer must pay 80% directly to you. Exceptions: spousal/child support orders can garnish up to 50% of net pay.

Stopping a Garnishment

• Pay the debt in full — the creditor must file a Notice of Termination with the court
• File a Notice of Motion to set aside the judgment — possible if you were never properly served with the original claim
• Negotiate a consent order / payment plan — creditor agrees to pause garnishment
• Consumer Proposal or Bankruptcy — triggers an automatic stay of all garnishments (speak to a Licensed Insolvency Trustee)

Exempt Assets — What Creditors Cannot Touch

• RRSP contributions made more than 12 months ago (bankruptcy only)
• Household furnishings and appliances up to $14,180
• One motor vehicle up to $7,117 in equity
• Tools of the trade up to $14,405
• Principal residence equity (certain exemptions apply)