Stopping CRA Garnishments: Effective Steps You Can Take

Few things create stress faster than finding out the Canada Revenue Agency (CRA) is coming after your paycheque or bank account. A letter marked “Requirement to Pay” can make it feel like your income isn’t yours anymore.

The good news? You’re not stuck.

Whether you’re already dealing with a wage garnishment or you’ve just been warned about one, there are real ways to stop CRA collections and protect your income.

Let’s go over the CRA garnishment rules, what happens when a Requirement to Pay is issued, and how to stop CRA garnishment quickly.

CRA Garnishment Rules You Need to Know

A garnishment is a legal process that lets a creditor take money or property, often from your wages, to recover what you owe. Normally, creditors have to apply to a provincial court before they can garnish your income. The CRA doesn’t have to.

Under current CRA garnishment rules, the agency can send a Requirement to Pay letter directly to your employer or bank. Once that letter is sent, your employer or bank is legally required to forward part of your wages — or sometimes your full bank balance — straight to CRA until the debt is paid in full.

That means the CRA can garnish up to 50 percent of your wages and even 100 percent (if self employed also)  of your bank account funds. Once a Requirement to Pay letter goes out, your employer or bank must comply immediately.

If you’ve received a call or notice from CRA threatening wage garnishment, take it seriously. Ignoring it will only make things worse. But acting quickly can stop it before it goes any further.

How to Stop Wage Garnishment in Canada

When it comes to how to stop wage garnishment in Canada, only certain options work. Credit counselling or debt settlement companies can’t legally stop CRA collections. But there are several real, effective steps you can take.

1. Negotiate directly with CRA

You can always try calling CRA yourself to set up a payment plan. In some cases, they’ll agree to monthly installments that make things a little easier.

The catch? CRA collection agents don’t have the authority to lower the amount you owe or remove penalties, they’re mainly there to collect the full balance.

That means even if you get a short-term break, the payments can still be tough to manage long term. Many people find that these arrangements only delay the stress rather than solve it.

2. Work with a tax professional

If dealing with CRA directly feels intimidating, you can bring in reinforcements. Tax professionals can assess your situation, talk to CRA on your behalf, and look into relief programs that might buy you some time.

They might be able to delay the garnishment or work out a short-term deal while you plan your next move.

3. File a consumer proposal

If you’re looking for a way to hit pause on CRA collections fast, this is it. A consumer proposal stops a CRA garnishment the moment it’s filed. Once a Licensed Insolvency Trustee (LIT) submits your proposal, CRA has to back off — no more wage garnishments, no more calls, no more stress.

From there, you’ll work out one affordable monthly payment that fits your budget. You’ll  repay only part of what you owe – provided the proposal is accepted, and you won’t pay any extra interest or penalties along the way. CRA is treated just like any other creditor, so they have to play by the same rules.

4. File for bankruptcy

Bankruptcy works a lot like a reset button. Just like a consumer proposal, it stops CRA collections immediately under Canada’s Bankruptcy and Insolvency Act. That means CRA has to lift the garnishment and stop contacting you altogether.

It’s not the first option most people jump to, but when a consumer proposal isn’t possible, bankruptcy offers a guaranteed way to protect your income and start over financially.

How to Stop CRA Garnishment Quickly

If your paycheque or bank account is already being garnished, speed matters. The only guaranteed legal ways to stop CRA garnishment immediately are by filing a consumer proposal or bankruptcy through a LIT.

As soon as your filing goes through, everything changes. The legal stay of proceedings kicks in immediately. The CRA has to stop collecting, and your employer or bank will be told to release your income.

How Farber Can Help Stop CRA Garnishments

At Farber Debt Solutions, we’ve helped thousands of Canadians stop CRA wage garnishments and take back control of their income.

We’ll help you understand your options clearly, explain the process in plain language, and guide you through each step.

There are no hidden fees and no pressure, just straightforward advice that helps you move forward.

If you’ve received a Requirement to Pay CRA letter or a notice of garnishment, don’t wait. Acting now can make all the difference in protecting your income.

FAQ – CRA Garnishment Rules and Relief Options

What are CRA garnishment rules in Canada?

CRA doesn’t need to take you to court to collect unpaid taxes. They can send a “Requirement to Pay” letter straight to your employer or bank, which lets them take up to half of your pay or even the full balance from your bank account until your debt is paid off.

How can I stop wage garnishment in Canada?

The fastest way to stop wage garnishment is by filing a consumer proposal or bankruptcy through a Licensed Insolvency Trustee. Both options immediately stop CRA collections and protect your income.

How quickly does CRA garnish wages?

The quickest and most reliable way to stop a CRA garnishment  is by filing a consumer proposal or bankruptcy with a Licensed Insolvency Trustee. Both options provide a stay of proceedings which requires CRA to stop the garnishment.

Can consumer proposals stop CRA garnishments?

Yes. Filing a consumer proposal instantly stops CRA garnishment and allows you to repay a portion of your debt through manageable, interest-free payments.

Is bankruptcy the only way to stop CRA garnishment?

Not at all. Bankruptcy does stop garnishment, but a consumer proposal is an alternative that allows you to avoid bankruptcy while still lowering what your owe and protecting your assets. It helps you avoid bankruptcy while still lowering what you owe and protecting your assets.

Take Back Control of Your Income

If CRA has started garnishing your wages or freezing your bank account, it’s time to act. Filing a consumer proposal or bankruptcy can stop CRA collections immediately and give you a path toward financial stability.

Book a free consultation with Farber today to learn how to stop CRA garnishment, protect your income, and move forward with confidence.