Frozen Bank Account in Ontario: What a Garnishment Notice Means and How to Respond
If your debit card was declined this week, an e-transfer bounced, or your online banking shows a balance you suddenly cannot touch, the most likely explanation is a Notice of Garnishment. A private creditor cannot freeze your account on the strength of a phone call or a collection letter. In Ontario, it first needs a court judgment against you, then a notice served on your bank. The detail that catches people off guard: the 20-per-cent cap you may have heard about for wage garnishment does not apply to a bank account. Once money is sitting in the bank, it is no longer “wages” for that purpose, and a garnishment can reach the full balance — unless the money is separately protected because of where it came from. Here is how the freeze actually works, and what to do about it today.
How a bank account gets frozen
A private creditor — a collection agency, a bank, a credit-card issuer — needs a judgment before it can touch your account. The sequence is the same one that ends in a wage garnishment: you are served with a Statement of Claim; if it is not defended, the creditor obtains judgment, often by default; only then can it ask the court to issue a Notice of Garnishment against your bank. That happens under Rule 60.08 of the Rules of Civil Procedure in the Superior Court of Justice, or Rule 20.08 of the Rules of the Small Claims Court for claims up to $50,000 — where most Ontario consumer-debt lawsuits now land. The creditor files a requisition and the judgment with the court; the court issues the notice; the notice is served on the bank branch holding the account and on you, the debtor.
Two situations skip the “judgment first” rule. The Canada Revenue Agency can send your bank a requirement to pay for a tax debt directly under the Income Tax Act, without suing you. And support or maintenance debts are typically enforced through the Family Responsibility Office under its own rules, not an ordinary Notice of Garnishment. Everything else — credit cards, personal loans, lines of credit, collection-agency accounts — needs a judgment first.
It is not necessarily a one-time hit
The notice itself (Form 20E in Small Claims Court) requires the bank to pay over all funds now in the account within 10 days of being served, and — this is the part people miss — all money that becomes payable to you for up to six years after the notice is issued, each new amount within 10 days of landing. In plain terms, a garnishment against a bank account is not automatically limited to the balance the day it was served. Left unresolved, it can keep catching deposits — a paycheque, a refund, an e-transfer — as they arrive, until the judgment is paid, the notice is terminated, or a court varies it.
What money is protected
Employment insurance, social assistance (Ontario Works or ODSP), and government pensions such as CPP and OAS generally cannot be garnished by an ordinary private creditor, even once the funds have been deposited into your account, according to the Ministry of the Attorney General’s small claims guidance. The catch: money in a bank account does not announce where it came from. The bank and the court will not automatically sort your ODSP deposit from everything else — you or your advisor need to identify it and assert the exemption, in writing and quickly, or ask for a hearing on the notice. The CRA sits outside this protection for its own debts: it has separate, broader powers to apply certain federal payments against a tax debt.
Joint accounts are not automatically off-limits
A joint account can be garnished, but only for the debtor’s own share of it — the form language is the debtor’s “appropriate share,” which in practice is often treated as an equal split absent evidence otherwise, not the whole balance. The co-owner (a spouse, for example) is entitled to notice and can dispute the split at a hearing. If a joint account was frozen and most of the money is demonstrably the co-owner’s — their pay, their benefits — that is worth raising immediately rather than assuming the freeze is final.
What to do right now
- Get the actual notice. Ask your bank for a copy, or check the court file for the claim number, the creditor’s name, and the amount claimed. Confirm whether this is a private judgment, a CRA requirement to pay, or an FRO support enforcement — the response is different for each.
- Check how the judgment was obtained. A large share of garnishments trace back to a default judgment — signed because a defence was never filed, sometimes because the claim was never properly served. If that is what happened here, a motion to set aside the default judgment can remove the basis for the garnishment entirely. See being sued for debt in Ontario if you are not sure whether you were ever properly served.
- Assert any exemption immediately. If some or all of the frozen money is EI, social assistance, CPP, OAS, or a similar protected source, say so in writing to the bank and the creditor, and request a garnishment hearing if it is not released.
- Raise a joint-account share dispute if applicable, with proof of whose money it actually is.
- Negotiate. A judgment creditor can agree to a lump sum or a payment plan; once the judgment is satisfied, the creditor must serve a Notice of Termination of Garnishment on the bank.
- Consider whether insolvency is the faster fix. A consumer proposal triggers an automatic stay under the Bankruptcy and Insolvency Act that generally halts a garnishment on unsecured debt — see wage garnishment in Ontario for how that stay works and where it does not reach.
Frequently asked questions
Can a creditor freeze my bank account without suing me first? Not for an ordinary debt like a credit card or loan. It needs a judgment, then a Notice of Garnishment served on your bank. The CRA and family-support enforcement are the two exceptions.
Is only 20 per cent of my account protected, like wages? No. The Wages Act’s 80-per-cent exemption applies to wages while they are still in your employer’s hands. Once the money is deposited, that cap no longer applies — a bank-account garnishment can reach the full balance unless the specific funds are separately exempt.
Can they take my CPP, OAS, or ODSP payments? Generally not, even after deposit, for an ordinary private debt — but you need to identify and assert the exemption; it is not automatic.
Will it keep happening every time I get paid? It can. The notice can catch new deposits for up to six years unless it is paid off, terminated, or varied by the court.
Frozen accounts create their own emergencies — bounced payments, missed rent, cascading fees — on top of the underlying debt. Tell us what’s in the notice and we will help you work out whether the faster path is a set-aside motion, an exemption claim, a settlement, or something else.
Sources: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 60.08 · Rules of the Small Claims Court, O. Reg. 258/98, r. 20.08 · Form 20E, Notice of Garnishment, Ontario Court Services · After Judgment — Guide to Getting Results, Ministry of the Attorney General · Steps to Justice — Have a Notice of Garnishment issued, CLEO · Wages Act, R.S.O. 1990, c. W.1, s. 7 · Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 69.2. General information for Ontario, not legal advice.
General information for Ontario, not legal advice. Reviewed by Angelos Spingos. Last reviewed September 17, 2026.