Garnishment Order in Ontario Small Claims Court: What Defendants Need to Know

A garnishment order can freeze part of your wages or drain your bank account before you even know it's been issued. If you've lost a Small Claims Court case in Ontario — or had a default judgment entered against you — the judgment creditor can use garnishment to collect without your cooperation.

How Garnishment Works in Ontario Small Claims Court

After obtaining a judgment, the creditor files a Notice of Garnishment (Form 20E) with the court, paying a $144 issuance fee. The court clerk then issues the garnishment to your employer, bank, or anyone else who owes you money (the "garnishee").

The garnishee is legally required to hold the funds and pay them to the court, not to you. For wage garnishment, your employer starts deducting a portion of each paycheque. For bank accounts, the institution freezes the garnishable amount and sends it to the clerk.

Wage Garnishment Exemptions Under the Wages Act

Ontario's Wages Act generally exempts 80% of wages from garnishment — meaning the creditor can usually reach up to 20% of wages after legally required deductions. For someone earning $4,000 net per month, that is up to $800 per month. Different rules apply to support or maintenance orders, and a judge may decrease the exemption after a motion.

The exemption is automatic. Your employer is supposed to calculate and apply it without you filing anything. If they're taking more than 20%, check whether a support order or court order authorizes it and seek advice about disputing the amount.

Some amounts remain exempt even after deposit into a bank account, including employment insurance, social assistance, and pension payments. Wages deposited into an account may also remain partly exempt under the Wages Act. If protected funds are frozen, you may need to identify their source and dispute the garnishment promptly.

What to Do When You Receive a Garnishment Notice

If you're served with a Notice of Garnishment, the garnishee may dispute all or part of it. For a joint debt, the creditor sends the co-owner a Notice to Co-Owner of Debt (Form 20G) after receiving the garnishee's statement:

1. Check whether the underlying judgment is valid. If you were noted in default without knowing about the case, you may have grounds to set aside the judgment (Form 15A motion, $127 filing fee).
2. Verify the amount. The garnishment should match the judgment plus post-judgment interest and allowable costs. Errors happen.
3. Assess your exemptions. If wage garnishment is taking more than 20%, or if frozen bank funds are provably exempt income, act immediately.
4. Consider a motion to vary or stay enforcement. Under Rule 20.02, the court may stay enforcement or vary the timing and amounts of payments if your financial circumstances have changed. A motion does not stop enforcement unless the court orders a stay.

Garnishment of Joint Accounts

If a debt owed to you is also owed to one or more co-owners, generally only one-half of it may be garnished unless the court orders a different amount. The bank, as garnishee, files a Garnishee's Statement (Form 20F) if it disputes the garnishment or says the debt is jointly owed. A co-owner who receives a Notice to Co-Owner of Debt (Form 20G) may request a garnishment hearing within 30 days and provide evidence of their interest, such as deposit records and bank statements.

Can You Stop a Garnishment?

There are several paths:

• Pay the judgment in full. The creditor must file a Notice of Termination of Garnishment once satisfied.
• Negotiate a payment plan. If the creditor agrees to voluntary payments, they can terminate the garnishment. Get any agreement in writing and filed with the court.
• Motion to the court. If the garnishment creates genuine hardship, bring a motion under Rule 20.08 requesting reduced payments or a stay.
• Set aside the underlying judgment. If the judgment was entered by default and you have grounds, a successful Form 15A motion eliminates the garnishment entirely.

The Examination Process (Form 20H)

Before or alongside garnishment, a creditor may serve you with a Notice of Examination (Form 20H), requiring you to attend court under oath to disclose your income, assets, bank accounts, and employment details. The examination fee is $68.

Ignoring a Notice of Examination can result in a contempt finding and a warrant for your arrest. Attend, answer honestly, and bring your financial records.

Our Defending a Claim in Ontario Small Claims Court guide covers the full post-judgment landscape — from garnishment defence to appeal options — so you know your rights before enforcement begins.

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