Wage and bank garnishment after a Small Claims Court judgment

What garnishment is, and what it is not

Garnishment is a post-judgment enforcement step. The creditor obtains a notice of garnishment from the court and serves it on a third party, the garnishee, who owes money to the debtor or holds money for them. Typically that is an employer or a bank. The garnishee is then required to pay the attachable portion into court.

Nothing about that process guarantees payment. A notice can produce nothing at all: the job may have ended, the account may be empty, the funds may be exempt, another creditor may rank ahead, or a stay may intervene. Any figure you calculate before serving a notice is a statutory starting amount, not money in hand.

Wages: what the percentage is applied to

Section 7 of the Wages Act applies its exemption to wages after the deductions the employer is required by law to make. Voluntary deductions - a savings plan, an optional benefit top-up, a personal loan repayment the employee arranged - stay in the base. Getting this wrong is the single most common source of an inflated estimate.

On an ordinary judgment debt, 80% of that base is exempt, so 20% is potentially exposed. Where the garnishment enforces an order for support or maintenance, 50% is exempt, so 50% is potentially exposed. A judge may increase or decrease either exemption where the facts justify it, so neither figure is immovable.

Support enforcement in Ontario ordinarily runs through the Family Responsibility Office rather than through a private notice of garnishment. The 50% figure is set out here so the arithmetic is understood, not as a route to follow.

Bank accounts: a different calculation entirely

The wage percentage has nothing to do with bank balances. A bank garnishment attaches the debt the bank owes the debtor - the balance payable - limited by the amount stated in the notice of garnishment. It is a one-time figure, not a recurring percentage, and it is subject to exemptions, the bank's own set-off rights, competing claims, and the facts of service.

Jointly payable debts and Rule 20.08(2)

Where a debt is payable jointly to the debtor and one or more other people, Rule 20.08(2) makes one-half - 50% - the default starting point, and the court may order a greater or lesser share. That default is a procedural convenience. It is not a finding that the debtor beneficially owns half the money.

The co-owner is not a bystander. The Rules provide for notice to the co-owner and for a hearing where the share is disputed, and evidence about the source and purpose of the funds can move the number in either direction.

How the process runs after judgment

• The notice is directed to the branch or place where the debt is payable to the debtor.
• The debtor is generally served within five days after the garnishee is served.
• The garnishee generally pays into court within 10 days after service, or after the debt becomes payable if that is later.
• A notice of garnishment is ordinarily issued within six years of the order and remains in force for six years, subject to the Rules and any renewal.
• The first payment is generally held about 30 days so competing claims can be sorted out.
• Competing creditors, other orders, and stays can change who is paid and when.
• The creditor must terminate the garnishment once the judgment is fully paid.

Three short worked examples

1. Ordinary debt. The statutory wage base for a pay period is $1,200, with a further $150 of voluntary savings deductions that are not subtracted. 20% of $1,200 = $240 potentially exposed for that period; $960 is exempt.

2. Support exception. On the same $1,200 base, the support branch exempts 50%, leaving $600 potentially exposed, subject to judicial adjustment.

3. Jointly payable bank debt. A bank reports $2,000 payable on a jointly held account. The Rule 20.08(2) default starting amount is $1,000, limited by the notice amount and by any court order, and it is not an ownership finding.

Exempt and protected funds

Some payments are protected in whole or in part from garnishment. Whether a particular payment is protected depends on the statute that creates it and on the facts, so neither a blanket statement that all pensions and benefits are safe, nor the opposite, is accurate. If a garnishee statement suggests protected funds are involved, the debtor should raise the issue on the record rather than waiting for payment out.

Ownership, set-off, and competing creditors

Garnishing an account does not resolve who legally owns the money. A bank may assert set-off rights for amounts the debtor owes it, and other creditors may hold earlier notices or statutory priority. Any of these can reduce or eliminate what a creditor recovers.

What is outside this guide

This guide does not cover family-support enforcement through the Family Responsibility Office, federal Crown or federal public servant garnishment, or the Canadian Armed Forces regime. Each is governed by separate legislation and its own process.