In Ontario, once you have a formal court judgment, initiating a bank garnishment takes about 1 to 2 weeks. Once served, the bank must freeze the debtor’s account within hours and remit the funds to the court within 10 days. The Sheriff will then hold the money for 30 days before releasing it to you. The court filing fee for the Notice is roughly $144 CAD.
Winning a commercial lawsuit and securing a judgment in the Ontario Superior Court of Justice is a major victory. However, as many business owners quickly discover, a judgment is just a piece of paper; it does not automatically put money into your corporate bank account. If the losing business (the debtor) refuses to write a cheque to satisfy the debt, you must take active legal steps to enforce the judgment.
One of the most effective enforcement mechanisms in Ontario is garnishing the debtor’s corporate bank account. By issuing a Notice of Garnishment, you legally force the debtor’s bank to freeze their funds and redirect them to the court to pay off your unpaid B2B invoices. Understanding the strict timelines and procedures under the Rules of Civil Procedure will help you collect your money faster.
Step-by-Step Process to Garnish a Bank Account in Ontario
Garnishment is a powerful tool, but it requires pinpoint accuracy. If you serve the wrong bank branch or make an error on the forms, the bank will reject the garnishment. Most creditors hire an experienced civil litigation or enforcement lawyer to handle these steps.
Step 1: Obtain the Formal Issued Judgment
Before you can enforce anything, your judgment must be formally signed and entered by the registrar of the Superior Court of Justice. This document proves to the world that the debtor legally owes your business a specific sum of money, plus any awarded legal costs and post-judgment interest.
Step 2: Locate the Debtor’s Bank Account
You must know where the debtor banks. If you have a history of doing business with them, your lawyer can often find their banking details from old cleared cheques, pre-authorized payment forms, or wire transfer records. If you do not know, your lawyer can compel the debtor to attend an Examination in Aid of Execution to force them to reveal their banking information under oath.
Step 3: Draft the Sworn Affidavit and Notice of Garnishment
Your lawyer will prepare a strict set of documents. You (or your lawyer) must swear an Affidavit for Enforcement outlining the exact amount owed, the date of the judgment, and the calculation of accumulated interest. The Notice of Garnishment (Form 60H) is also prepared, naming the bank as the “Garnishee.”
Step 4: File the Documents with the Court
The Affidavit and Notice of Garnishment are filed with the local enforcement office (the court registrar). The registrar reviews the documents, officially issues the Notice of Garnishment, and stamps it with the court seal.
Step 5: Serve the Bank and the Debtor
This is where speed is crucial. The issued Notice must be legally served on the specific bank branch where the debtor holds their account. Within 5 days of serving the bank, you must also serve the Notice on the debtor business, informing them that their accounts have been frozen.
Step 6: The Bank Remits Funds to the Sheriff
Once the bank is served, they must immediately freeze the account up to the amount of the judgment. Within 10 days of being served, the bank is legally required to send the frozen funds directly to the Accountant of the Superior Court of Justice (often referred to as the Sheriff).
Step 7: The 30-Day Holding Period
Under Ontario’s Creditors’ Relief Act, the Sheriff cannot give you the money immediately. They must hold the funds in trust for exactly 30 days. 📅 This period ensures that if there are other creditors who also have judgments against this debtor, the funds can be distributed fairly on a pro-rata basis. If no other creditors stake a claim, the Sheriff issues the cheque to your business.
How Much Does It Cost in Ontario?
Enforcing a judgment involves both court filing fees and enforcement costs. Fortunately, these costs can usually be added to the total debt the debtor owes you.
- Court Filing Fee: Issuing a Notice of Garnishment currently costs about $144 CAD at the Superior Court of Justice.
- Sheriff / Enforcement Fees: The Sheriff charges a fee for processing and distributing the funds, usually around $60 to $100 CAD, plus a small percentage of the funds collected.
- Lawyer Fees: Having a law firm draft, file, and serve the garnishment usually costs between $1,000 and $2,500 CAD depending on whether an investigation was needed to find the bank.
How Long Does the Entire Process Take?
From the moment you instruct your lawyer to the day the cheque clears into your corporate account, the timeline is highly structured. ⏱️
| Garnishment Stage | Estimated Timeline |
|---|---|
| Drafting and Court Filing | 1 to 2 weeks depending on court processing times. |
| Bank’s Deadline to Remit Funds | 10 days after being successfully served. |
| Sheriff’s Mandatory Hold | 30 days under the Creditors’ Relief Act. |
| Total Time to Receive Payment | Roughly 45 to 60 days total. |
Frequently Asked Questions (FAQ)
What happens if the bank account is empty?
If the debtor’s bank account has a zero balance or is in overdraft on the day the bank is served, the garnishment catches nothing. The bank will file a statement with the court confirming there are no funds. You will need to try garnishing a different bank or wait and serve a new notice later.
Does a Notice of Garnishment freeze the account forever?
No. A bank garnishment is generally a one-time “snapshot” capture. It seizes whatever funds are in the account at the exact moment the bank processes the order. If the debtor deposits $50,000 the next day, those new funds are not automatically caught unless a new Notice is served.
Can I garnish the personal bank account of the business owner?
Generally, no. If your judgment is strictly against a corporation (e.g., ABC Roofing Inc.), you can only garnish the corporate bank accounts. A corporation is a separate legal entity, and the owner’s personal assets are protected unless you successfully pierced the corporate veil during the trial.
Can the debtor stop the garnishment?
Yes, but it is difficult. The debtor would have to file an emergency motion in court to stay (pause) the enforcement, usually arguing that they are appealing the judgment or proposing a payment plan. If they file for bankruptcy or corporate restructuring, the garnishment is immediately halted.
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