What Is Wage Garnishment and How Can You Stop It?

Jowanna Daily
Expert Contributor
Last Updated:
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There are different ways a creditor can collect a debt; one of those ways is through wage garnishment. So, what is wage garnishment versus a bank levy, and how can you stop it from happening?

A wage garnishment is when a creditor collects debt payment from your paycheck. When the creditor has attempted to contact you to no avail, garnishment is their last ditch effort to collect on the debt. Alternatively, a bank levy or non-wage garnishment are ways to collect on a debt by collecting straight from a financial account, such as your bank account.

The process for garnishing your wages depends on the entity seeking to collect. When you receive notice that a creditor is attempting to garnish your paycheck, you need to act quickly to resolve the matter before garnishment starts. If you are already having financial difficulty, wage garnishment will only accelerate it.

What Is Wage Garnishment?

Sometimes, people are afraid or intimidated to speak with a creditor once they have fallen behind on their bills. It’s only a matter of time before your late payments default and wage garnishment commences. Wage garnishment is a serious and last resort step your creditors take to collect on a debt. Your creditor gets a court order that allows your employer to withhold a portion of your paychecks to pay an outstanding debt.

What Is Wage Garnishment and How Can You Stop It?

The creditor sends the order to your employer, who may or may not notify you of the wage garnishment. Before the wage garnishment process begins, you will receive notice regarding the judgment. If the judgment is wrong or if the garnishment will cause a financial hardship, immediately file an objection with the courts.

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How Wage Garnishment Affects You

Wage garnishment is more than an inconvenience — it may have significant consequences:

  • It may lower your credit scores, thus affecting your ability to do things like get a car financed. Even if you can get a credit card or financing, you pay a higher interest rate.
  • Garnishment may lower your disposable income, which may affect your ability to pay your household bills.
  • If you have more than one garnishment, your employer can terminate you.

Who Can Garnish Your Wages?

There are several types of wage garnishments. The process varies depending on the garnishment source. You can face wage garnishment for some of the following reasons:

  • You are behind on child support or alimony payments.
  • You have debt from bankruptcy.
  • You defaulted on your student loan payments.
  • You owe credit card debt, medical bills, or any other consumer debt.
  • You owe the government money.

Wage Versus Non-Wage Garnishment

There are two types of garnishment: wage and non-wage garnishment. A wage garnishment is one where the creditor obtains a court order to request funds directly out of your paycheck. A creditor is limited to how much money he can take out of your check. On the other hand, a non-wage garnishment is when a debtor collects money from an account — usually a bank account. Instead of obtaining an order to take money from your paycheck, the creditor requests to withdraw money from your account. The creditor can take all the money in your account in some cases.

Garnishment Laws

While garnishment laws vary from state-to-state, it is legal across all states to garnish wages for unpaid taxes and child support. Some states do not allow wage garnishment beyond taxes and child support. Check with your state to see if garnishing your check is lawful.

  • Most laws require your creditor to give you notice (with a few exceptions, i.e., owing back taxes).
  • An employer cannot terminate you when they receive an order to garnish your wage. Unfortunately, you lose that protection if you have more than one garnishment. Your employer may consider you a risk and can terminate your employment.
  • There is usually a maximum amount a creditor can request in a wage garnishment. They must leave enough for you to pay certain deductions, like your taxes and unemployment insurance; however, the law does not protect things like health insurance premiums from garnishment.

It is better to negotiate with your creditor before wage garnishment. You can solicit a credit counseling agency to help you. Unfortunately, once you have a court order, you lose your leverage (even if you are working with a credit counseling agency) because the court sets the payment arrangement, and it may not work in your benefit.

The Wage Garnishment Process

Remember, wage garnishment is your creditor’s last resort to collect on your debt. It usually happens if you have ignored your creditor’s attempt to receive payment on an outstanding balance. The creditor seeks a court order, and, if approved, the creditor sends the order to your employer. The only times a court order is not necessary is if you owe child support, back taxes, or student loans.

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Wage Garnishment: Child Support and Alimony

As of 1988, all new or adjusted child support orders come with a wage withholding order. Alimony only comes with an automatic wage withholding order if it is included with the child support as a family support payment. Otherwise, alimony does not qualify for automatic withholding.

When the court grants a child support order, either the person seeking the support or the court provides a copy of the order to the employer. The employer then withholds the amount and takes note of the impacted payment. The wage garnishment can include deductions for medical insurance if the court mandates the parent to provide health insurance as part of child support.

Usually, a creditor cannot garnish any more than 25% of your disposable income (or no more than 30 times the minimum wage — whichever is the lower of the two). This does not hold true for child support.

  • If you are married or have a child outside of the child support order, then only up to 50% of your disposable income is subjected to wage garnishment.
  • If you do not have a spouse or a child outside of the child support order, you can lose up to 60% of your disposable income.
  • Lastly, if you are over 12 weeks in arrears, an addition 5% can be taken out.

All-in-all, you can lose up to 65% of your disposable income; however, your employer cannot fire you or take disciplinary action because you owe back child support.

Wage Garnishment Process: Student Loans

Another creditor that can garnish your wages without a court order is the U.S. Department of Education (D.O.E) or a student loan agency working on its behalf. In other words, once you are in default, the D.O.E. does not have to plead its case to a court. Up to 15% of your pay is subject to garnishment when you default on your student loan.

The D.O.E. or the agency working on its behalf must give you written notification no less than 30 days before wage garnishment with the following information:

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  • The amount you owe
  • Instructions for getting a copy of the student loan records
  • Information on how to enter a voluntary repayment program
  • The process to request a hearing

Wage Garnishment Process: Back Taxes

IRS garnishment can be more severe. The IRS has greater latitude when it comes to garnishing money from your paycheck, and it does not need a court order. The IRS does not have a maximum amount it can garnish. Instead, the wage garnish is based on the number of dependents you have and your standard deductions.

The IRS notifies your employer, who, in turn, is mandated to give you a copy along with an exemption claim form to complete and return. While state and local tax agencies can garnish your wages, they do not have the same reach as the IRS. Since each state law varies, you must contact your state’s labor department to find out the wage garnishment laws.

Wage Garnishment Process: Consumer Debt

Consumer debt, such as credit cards, is also subject to wage garnishment. Consumer creditors, however, must get a court order to garnish your wages. When you first fall behind on your credit card payments, your creditor will attempt to collect. Once you default, the company determines whether they believe you will pay the debt. If they do not foresee you paying your debt, they may decide to sell your debt to a credit collection agency.

The credit collection agency will attempt to collect payment. If they are unsuccessful, they may seek a judgment to garnish your wages. It is better to try to negotiate with your creditor before they file a lawsuit.

Financial Hardship and Child Support Wage Garnishment

There are some circumstances where you can stop child support payments. If your financial situation has changed or if you are having financial hardship, it’s best to seek legal advice. Child support issues are handled in a different court process.

Financial Hardship and Student Loan Wage Garnishment

If your wage garnishment causes financial hardship, you have 30 days to object. During this time, you can:

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  • Request hardship assistance
  • Ask the student loan agency to modify a payment plan
  • Formally object in writing and request a hearing

Timely response is critical. It is to your advantage to work something out before garnishment starts.

Financial Hardship and IRS Wage Garnishment for Back Taxes

IRS garnishments can leave you in a difficult financial state. The IRS will give you written notice at least 30 days before garnishing your wages. Use that time to work out an agreement. If you are suffering financial hardship, you can claim the taxes are uncollectible due to said financial hardship. If proven, the IRS will temporarily stop collecting. You must prove through financial records that you are in a dire financial circumstance in order to qualify for this abatement.

Financial Hardship and Consumer Debt Wage Garnishment

If you are at risk of garnishment due to a consumer debt, such as an outstanding loan, credit card debt, or medical bill, and you are facing financial hardship, you can challenge the judgment. You must fill out a “claim of exemption” and a “financial statement.” These forms help you present your financial situation and includes your monthly income and expense.

It is essential to file your paperwork as soon as you receive your garnishment notice. Depending on your resident state, you may have to appear in person for the hearing. Make sure you bring all the documentation needed to present your argument. The judge may either dismiss the garnishment or modify it if the court accepts your opposition, or they may instead overrule your objection and the garnishment will stand. Make sure you come with a compelling case.

What to Do if You Believe the Judgment is Incorrect

What happens if you think the judgment is incorrect or if you believe it is not your debt at all? Proving a wrong judgment can be challenging. If you think that you were an identity theft victim or the amount is incorrect:

  • Respond immediately and dispute the judgment
  • Write your creditor a letter to notify them you did not incur the debt; include the evidence with the letter
  • Seek legal help

Wage garnishment is a serious situation. If you are getting missed payment notices, do not ignore them. Discuss your financial situation with your creditor. The creditor will likely prefer to work with you rather than filing for a judgment.

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If you have not responded to any prior notice and you get a notification that your creditor obtained a judgment against you, it is still not too late to respond. Respond to the judgment immediately. Seek legal counsel if you have a case of mistaken or stolen identity or if you do not know how to proceed. It is harder to negotiate or dispute a claim once garnishment starts.

If you need help with settling your debt, it’s advisable that you find a debt settlement company that will help put a stop to your wage garnishment. Let our team help you find the best match for your situation and your budget. At Solvable, we do all the heavy lifting by using our digital platforms to review the best companies after we perform an extensive verification process. Find someone to help you stop wage garnishment today.


Jowanna Daily
Expert Contributor
Last Updated: