Worried About Being Garnished? What You Need to Know (in Alberta)
If your wages are being garnished or you've been warned they soon will be here is what you need to know, including your options for stopping it.
What Is Wage Garnishment?
Wage garnishment is when money is taken directly from your paycheque remitted by your employer to your creditor rather than paying you.
Be careful not to confuse a wage garnishee with a wage assignment. A wage assignment is a voluntary agreement you make with a creditor, usually at the time you sign a loan or credit agreement, which gives the creditor permission to go directly to your employer (without a court order) and have payments taken from your paycheque if you fall behind on the loan.
In Canada, the rules for wage garnishment are set provincially. In Alberta, most creditors must first obtain a court judgment before they can garnish wages. The exception is Canada Revenue Agency (CRA), which can garnish wages without a court order. A consumer proposal or bankruptcy filing immediately stops wage garnishment through a legal stay of proceedings. In Alberta, the rules are governed by the Civil Enforcement Act and related regulations. The comments in this article are specifically related to Alberta.
Can a Creditor Just Garnish Your Wages?
A creditor generally cannot just garnish wages because you owe them money. Most creditors must first successfully sue you and obtain a judgment in Court before they can issue a garnishee summons to your employer.
Important exception: CRA does not need a court order.
Canada Revenue Agency (CRA) does not need to obtain a court judgment before garnishing your wages for unpaid taxes or overpaid government benefits. They can act as soon as a Notice of Collection has been issued and the required legal warning period has passed, making CRA one of the most powerful creditors in Canada.
Another exception is the Maintenance Enforcement Program (MEP) which enforces child support and spousal support orders/agreements – they do not require a Court order either.
What To Do If Your Wages Are Being Garnished
How Much Can Be Garnished in Alberta?
Alberta law (the Civil Enforcement Act) provides some protection. In most cases, you cannot have your entire paycheque taken, but the rules can be difficult to follow. Here is our understanding of the general rules setting out exemptions for earnings:
| Earnings Type | Amount Exempt From Garnishment (Alberta) |
|---|---|
| Employment income (single) | First $800/month exempt; 50% between $800 and $2,400 exempt; 100% of amounts above $2,400 subject to garnishment |
| Employment income (with dependents) | First $800 plus additional $200/month exempt per dependent. 50% of next $1,600 exempt; 100% of anything above subject to garnishment |
| Private pension income (employer pension, payments from registered plan) | Treated like employment income |
| Business revenues, including contractor pay | No exemption. 100% may be garnished. |
| CRA garnishment (employment income) | Typically 30% to 50% of gross pay |
| Government benefits (CPP, EI, OAS, AISH, social assistance) | Exempt from seizure, except by CRA and MEP |
| Cash from income in your bank account |
Cash in your account is generally not exempt unless you can prove it came directly from exempt income |
Note: These are general guidelines. Your specific exempt amount depends on your income level, family situation, and the type of creditor. Always get advice specific to your situation.
Acting quickly gives you more options. Here is what to consider:
1. Pay the debt in full
The fastest way to stop garnishment is to pay the full amount owed. If you have assets you can liquidate or a family member who can help, this eliminates the debt entirely.
2. Negotiate directly with the creditor
In some cases, you may be able to negotiate a settlement or payment arrangement directly with the creditor that leads them to lift the garnishment.
3. Apply to Court for Relief
If the garnishment is causing severe hardship, you can apply to have the amount reduced. However, you may need the assistance of a lawyer to do this, and results can vary.
4. File a consumer proposal
Filing a consumer proposal immediately stops wage garnishment through a legal stay of proceedings. A consumer proposal typically allows you to settle your debt for less than you owe without losing assets through a structured repayment plan of up to five years.
5. File for bankruptcy
Bankruptcy also triggers an immediate stay of proceedings, stopping garnishment immediately. While bankruptcy may have more significant impacts than a consumer proposal, including the potential surrender of certain assets, it may be the right solution if your debt level or other factors make a consumer proposal unworkable.
Wages being garnished in Alberta? You can stop it today.
A consumer proposal or bankruptcy filing immediately stops wage garnishment through a legal stay of proceedings. Charla Smith & Company is a Calgary Licensed Insolvency Trustee offering free, no-obligation consultations. With just a conversation, we can often tell you whether you qualify and give you guidance on what your best option is.
→ Book your free consultation now
What Factors Will Determine the Best Option for You?
The best course of action depends on several factors:
- What assets you have that could be used to pay the debt
- Your ability to pay over time based on your income and stability of your cash flow
- Whether the garnishment is from CRA or another creditor (CRA requires specific strategies)
- Your total debt picture — other debts alongside the garnishment may make insolvency the most sensible path
Every situation is different. Acting quickly gives you the most options. Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee serving the Alberta region. We regularly help individuals consider their options when they are facing wage garnishment and help them regain control of their finances.
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Frequently Asked Questions
Yes, but the options are more limited than with other creditors. You can pay the debt in full, negotiate a payment arrangement with CRA (though this provides no legal stay), apply for hardship relief, or file a formal insolvency filing (consumer proposal or bankruptcy) which immediately stops the garnishment. Read our detailed post: What to Do If You Receive a CRA Notice of Collection.
Yes. The moment a consumer proposal is filed with the Office of the Superintendent of Bankruptcy, a legal stay of proceedings automatically takes effect. This stops all wage garnishment from CRA, banks, credit card companies, or any other unsecured creditor, as long as the funds haven’t already been diverted.
In Alberta, there is a basic exemption on employment income. The first $800 per month is generally exempt from garnishment, with an additional $200 per month per dependent. However, the exemptions do not necessarily apply to CRA or child support, nor do they apply to business income. Also, creditors may be able to seize 100% of funds in a bank account. Consult a Licensed Insolvency Trustee for advice specific to your situation.
Most creditors cannot. In Alberta, most creditors must obtain a court judgment first before issuing a garnishee summons to your employer. The significant exception is Canada Revenue Agency. CRA can garnish wages for unpaid tax debt without a court order, as long as the required legal warning (a Notice of Collection) has been issued.
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