Can a creditor freeze my bank account in Ontario to collect what I owe?
A creditor cannot freeze or garnish your bank account simply by asking your bank. They must first obtain a court judgment against you. Once they have a judgment, they can serve a Notice of Garnishment on your financial institution. The bank is then required to hold — and eventually remit to the court — funds in your accounts up to the amount of the judgment debt.
Ontario law does provide some limited exemptions. Certain government benefit payments deposited into a bank account — such as the Ontario Disability Support Program (ODSP) payments — retain their exempt status even after deposit, though enforcing this exemption in practice can require a court motion. Regular wages or savings do not carry a similar automatic exemption once they sit in a bank account.
A bank garnishment notice covers money in the account on the day it is served, plus amounts deposited over the next 30 days. This means multiple garnishment notices may be served in sequence. If your account is jointly held, a creditor can only garnish your share of the funds, though disputes about what constitutes your share may need to be resolved by the court.
If your account has been garnished, act quickly. A lawyer can advise whether a motion to stop or vary the garnishment is appropriate, especially if exempt funds are involved.
Key takeaways
- A judgment is required before a creditor can garnish a bank account.
- A Notice of Garnishment covers funds present on the day of service plus the following 30 days.
- Certain exempt income, such as ODSP, may retain protection even in a bank account.
- Act quickly after garnishment — there are limited windows to challenge.