Wage garnishment: What to know
December 20, 2022 6 min read
If someone owes a debt that they haven’t repaid on time, it’s possible for a court to order that a portion of their paycheck go toward repaying the debt. This is called wage garnishment. Certain laws regulate how much money can be withheld each pay period. But generally, the wages will be garnished until the debt is paid back.
Learn more about what wage garnishment is and how it works.
- Wage garnishment is a legal process where an employer is ordered to withhold a portion of someone’s paycheck until their debt is repaid.
- Unpaid consumer debt, federal student loans, taxes and child support may lead to wage garnishment.
- The Consumer Credit Protection Act (CCPA) limits how much money can be garnished each pay period.
What is wage garnishment?
Wage garnishment is a legal process where an employer is ordered to set aside part of a debtor’s paycheck until the debt is repaid in full. The court may order that an employee’s wages be garnished in several circumstances, including:
- Unpaid taxes
- Unpaid child support
- Bankruptcy orders
- Defaulted federal student loans
- Consumer debts, like unpaid credit card balances
How does wage garnishment work?
Wage garnishment often requires a court order. The process usually begins when a debtor is sued for failing to repay their debts.
If the lawsuit is successful, the judge will issue a garnishment order, which requires the employer to withhold a portion of the debtor’s paycheck—as long as their disposable income exceeds a certain amount. Wages can be garnished until the balance—plus interest and court fees, in some cases—is repaid in full.
But a court order isn’t always needed to start garnishing wages. For instance, wages can be garnished without a court order if someone falls behind on federal student loans. The IRS can also levy wages or bank accounts if someone owes unpaid, overdue taxes.
How much of your wages can be garnished?
The Consumer Credit Protection Act (CCPA) limits how much money can be garnished from wages. The final amount depends on two factors:
- The type of debt
- The amount of disposable income made each week
For instance, if a debtor’s disposable income falls below a certain amount, wage garnishment may not be legally allowed. But if their income is at least 30 times the federal minimum wage ($7.25), their wages could be garnished.
Here’s a look at how much can be garnished in wages, based on the type of debt.
|Type of debt||Maximum amount withheld|
Up to 25% of the garnishee’s disposable income or the amount by which their disposable earnings exceed 30 times the federal minimum wage (currently $7.25/hour). Here’s a breakdown:
|Child support and alimony||Up to 50% of the garnishee’s disposable income if they’re currently supporting another spouse or child or up to 60% if not. If payments are over 12 weeks late, the garnishee may owe an additional 5%.|
|Federal student loans||Up to 15% of the debtor’s disposable income.|
|Back taxes||Based on standard deductions and the number of dependents the debtor claims.|
Keep in mind that state laws surrounding wage garnishing may be different. For example, some states may offer additional protections. Others may have exemptions for certain types of debt. If you have questions about the laws in your state, consider contacting a legal professional for more information.
What types of wages can be garnished?
Wondering what’s considered disposable income? According to federal law, it’s the money left over after required deductions are made. These deductions may include Social Security contributions, state and federal taxes and unemployment insurance tax.
And earnings can include more than a paycheck. Other forms of compensation that could be subject to garnishment are:
- Relocation incentives
- Severance pay
- Insurance settlement payments
- Income from profit-sharing plans
- Workers’ compensation payments
Wage garnishment FAQs
How can wage garnishment be stopped?
Each state has different laws, but generally if a garnishment order is put in place, the only way to reverse it is to go back to court to convince a judge the original judgment was incorrect.
Garnishees may be able to qualify for an exemption—like a hardship or head-of-household exemption—that could prevent their wages from being garnished or reduce the amount withheld. Some states protect up to 100% of a garnishee’s disposable income so they can support their family.
If a debtor can’t afford to repay the full balance, they may be able to negotiate and establish a debt settlement. When someone settles a debt, the creditor agrees to reduce the amount of money they have to pay back in exchange for the debtor repaying what’s left.
Can my wages be garnished after 7 years?
According to the Consumer Financial Protection Bureau (CFPB), “In most states, the debt itself does not expire or disappear until you pay it.” However, the CFPB suggests there may be an exception if a debtor is sued after the statute of limitations has passed. Statutes of limitations can vary by state and the type of debt.
A state’s statute of limitations may not apply to federal taxes. Depending on the amount owed and the debtor’s circumstances, the IRS could have six years or longer to garnish wages.
Who can garnish wages without notice?
Wages can’t be garnished without notifying the garnishee. Most of the time, a court order is required before a wage garnishment can be initiated. Then, they have to send the debtor a letter before they can begin collecting money.
Rules differ for federal back taxes. But the IRS is required to send a notice at least 30 days before they begin levying a debtor’s bank account.
Can you get fired for wage garnishment?
Because of Title III of the CCPA, an employer can’t fire a garnishee for wage garnishments on one debt—even if multiple garnishments or levies are brought against it. But federal law may not apply to a person whose wages are garnished for multiple debts. It might be worth checking with your state’s rules.
Wage garnishment in a nutshell
Several different types of unpaid debt can warrant a wage garnishment—and the best way to avoid it is by paying back debts on time.
To stay on top of debt, consider building a budget and using credit wisely. And if you’re struggling to pay off debt, these guides to paying off student loans, debt consolidation and credit card debt relief offer tips to make repaying debt more manageable.