Wage Garnishment for Debt

Wage garnishment — when a creditor takes money directly from your paycheck — is a serious consequence of unpaid debt. But it can only happen through a legal process, and you have rights throughout that process.

How Wage Garnishment Works

For most consumer debts, a creditor cannot garnish your wages without first suing you in court and obtaining a judgment. The process:

1. Creditor sues you for the unpaid debt
2. Court enters a judgment against you (either you lose, default, or settle)
3. Creditor obtains a writ of garnishment from the court
4. Writ is served on your employer
5. Employer withholds a portion of each paycheck and sends it to the creditor

The exceptions where no lawsuit is required first: federal student loans, back taxes, and child support/alimony can be garnished through administrative processes.

Federal Garnishment Limits

Federal law (Title III of the Consumer Credit Protection Act) limits the amount that can be garnished per paycheck to the lesser of:

• 25% of disposable earnings (gross pay minus mandatory deductions), OR
• The amount by which disposable earnings exceed 30 times the federal minimum wage ($217.50/week in 2024)

For child support, up to 60% of disposable earnings can be garnished (65% if you're already behind on payments).

Exempt Income and States With No Garnishment

Some types of income cannot be garnished for consumer debts:

• Social Security and SSI benefits
• VA benefits
• Federal student aid
• Workers' compensation

Several states offer stronger protection or prohibit wage garnishment entirely for private consumer debts: Texas, Pennsylvania, North Carolina, and South Carolina do not allow wage garnishment for most consumer debts (though they still allow it for taxes, student loans, and child support).

Responding to a Garnishment

If you receive a garnishment notice:

• Verify the judgment is valid — sometimes garnishments are based on debts you've already paid or debts that belong to someone else
• Check whether the debt is past the statute of limitations in your state
• Consider negotiating a lump-sum settlement with the creditor to release the garnishment
• File a claim of exemption if any of your income qualifies for protection
• Consult a bankruptcy attorney — Chapter 7 bankruptcy creates an automatic stay that immediately stops wage garnishments

See also: Suing Over Debt Collection Violations | Bankruptcy Overview