Wage garnishment: how it works and how to limit it

A garnishment is a court order telling your employer to hold back part of your pay and send it to a creditor. The CFPB says (CFPB, opens in a new tab) most creditors can garnish wages only after a court issues a judgment that you owe the debt, and the order can cover the judgment plus interest, fees and collection costs.

So a garnishment usually follows a lawsuit. If you were sued and did not respond, the court may have entered a default judgment, and the garnishment is the next step.

Some creditors do not need a lawsuit. Federal agencies, tax agencies and child support agencies can garnish pay or benefits without one in some cases, under their own rules (below).

For an ordinary consumer debt, 15 U.S.C. 1673 (Cornell LII, opens in a new tab) allows no more than the lesser of two amounts: 25 percent of your disposable earnings, or the amount by which your weekly disposable earnings are more than 30 times the federal minimum wage.

The Department of Labor's Fact Sheet #30 (U.S. Department of Labor, opens in a new tab) turns that into dollars at today's $7.25 minimum wage. The limit applies per pay period, however many garnishment orders your employer receives.

Often, yes. When a state law and the federal law differ, the Department of Labor says (U.S. Department of Labor, opens in a new tab) the one that leaves you more pay must be followed, and federal law keeps stricter state limits in force (15 U.S.C. 1677 (Cornell LII, opens in a new tab)).

Three large states show how much the rules vary. Other states set their own limits; LawHelp.org (LawHelp.org (Pro Bono Net), opens in a new tab) lists them with free legal aid.

A creditor with a judgment may try to garnish a bank account too. Federal benefits get special protection: the CFPB says (CFPB, opens in a new tab) your bank must protect two months of directly deposited benefits, such as Social Security and veterans' benefits, before it freezes or turns over money in the account.

Under 31 CFR Part 212 (eCFR, opens in a new tab), you do not have to claim an exemption first to use that protected amount.

Yes. The Department of Labor (U.S. Department of Labor, opens in a new tab) says the usual limits do not apply to state or federal tax levies or to certain bankruptcy court orders.

For child support or alimony, up to 50 percent of disposable earnings can be taken if you support another spouse or child, or 60 percent if you do not, plus 5 percent when payments are more than 12 weeks behind.

Federal agencies can garnish up to 15 percent of disposable earnings for defaulted debts owed to the government, including defaulted federal student loans, without a lawsuit and without regard to state garnishment laws.

For a federal agency garnishment, the Treasury says (U.S. Treasury, Bureau of the Fiscal Service, opens in a new tab) you may request a hearing if you do not owe the debt, disagree with the amount, or the garnishment would cause a financial hardship.

Each state has its own form and deadline. In Florida, the clerk attaches a notice and a Claim of Exemption and Request for Hearing form to the garnishment, and the creditor must mail them to you.

The notice says (Florida Legislature, opens in a new tab) to file the notarized form with the clerk within 20 days after you receive it and send copies to the creditor and to your employer or bank.

Only a lawyer can tell you which exemptions and defenses fit your case. These are questions that often come up, so you can bring the right papers.

A creditor with a judgment may still agree to a lump sum or a payment plan. The CFPB notes (CFPB, opens in a new tab) that a consumer attorney may help you negotiate a settlement or a repayment plan. Get any agreement in writing, and ask how it will be filed with the court and how the garnishment will be released.

If you have $10,000 or more of unsecured debt in total, we can talk through whether settlement fits the debts that are not in court. We will tell you plainly if a garnishment means you should speak to a lawyer first1.