Wage Garnishment: What It is Operated and What You Can Do

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Wage Garnishment: How It Does It and What You Can Do Do
The wage garnishment process is a court ruling that requires that a portion of your earnings be diverted to resolve a debt.
by Sean Pyles Senior Writer | Personal finance, credit, and personal finance Sean Pyles leads podcasting at NerdWallet as the host and producer of NerdWallet's "Smart Money" podcast. In "Smart Money," Sean talks with Nerds on the NerdWallet Content team to answer the questions of listeners about their personal finances. With a particular focus on sensible and actionable money advice, Sean provides real-world guidance to help people improve their financial lives. Beyond answering listeners' money questions on "Smart Money," Sean also interviews guests who are not part of NerdWallet and produces special segments that explore subjects like the racial inequality gap as well as how to get started investing, and the history of student loans.
Before Sean lead podcasting for NerdWallet the company, he also wrote about topics related to consumer debt. His work has been published throughout the media including USA Today, The New York Times and other publications. When when he's not writing about personal finances, Sean can be found digging around the garden, taking runs , and taking his dog for long walks. Sean is located within Ocean Shores, Washington.





Sep 19, 2022


Edited by Kathy Hinson Lead Assigning Editor Personal finance, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years with The Oregonian in Portland in positions such as copy desk chief and team leader for design and editing. Previous experience included the editing of copy and news at various Southern California newspapers, including the Los Angeles Times. She received a bachelor's degree in mass communication and journalism from The University of Iowa.







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A wage garnishment occurs when a court order that your employer stop paying a particular portion of your paycheck and then send it directly to the creditor or person who owes you money, until your credit is paid.
Child support, consumer debts , and student loans are common sources of garnishment of wages. Your wages will be garnished until the debt is paid in full or, if not resolved, repaid.
You have legal rights which include caps on how much can be taken at a time. And you can take steps to minimize the impact and help you bounce back.
Are you ready to take on your debt?
Monitor your balances and spend in one place to see your way out of the debt.






Types of wage garnishment and how it is done
The practice of garnishing wages is more widespread than you believe. A by ADP Research Institute found that 7 percent from the 12 million employees it assessed had the garnishment of their wages in 2016. For those aged 35 to 44, the number hit 10.2%. The top causes were child support; consumer debts; and .
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There are two types of garnishment:
In wage garnishment , creditors may legally require your employer to pay a portion of your wages to pay off debts.
In non-wage garnishment, also known as a bank levy, creditors are able to access an account in your banking institution.

The most common reason for garnishment is when a debt collector sues you for nonpayment of the debt, and then wins in court. Sometimes, however, a creditor can make garnishment happen without a court order for instance, if you are in debt to child support, tax back or a balance on the federal student loans.
The court will issue notices to your employer or bank, and the garnishment will begin in five to 30 business days, depending on the creditor you have chosen and your state. The garnishment will continue until the debt, potentially including court costs and interest is settled.
How much of your salary can be garnished?
Here's a brief overview of the federal limits for the amount of your disposable income a creditor can take. (When it comes to wage garnishment "disposable income" refers to anything left over after the necessary deductions like taxes and social Security.)
Type of debt



Percentage of disposable income per week which can be used to take



Medical and credit card bills Personal loans and a lot of other consumer debts


The amount you earn is either 25 percent or the percentage that your weekly earnings exceeds 30 times the federal minimum wage (currently $7.25 for an hour) which is the lesser amount. Here's how to break it down:
The weekly amount you earn is $290 or more A maximum of 25percent will be allowed.
* If the sum is between $289.99 and $217.51 The amount that is greater than $217.51 is able to be used.
* If it's $217.50 or lower, garnishment is not allowed.


Alimony and child support


Up to 50% if you're supporting another child or spouse or a spouse; otherwise, you can get up to 60%. If you are more than 12 weeks behind in payments An additional 5% may be taken.


Federal student loans


Up to 15 15%.


Taxes


The Internal Revenue Service will determine the amount you pay by taking standard deductions and how many dependents are you having.








Nerdy Tip
State laws regarding garnishment can vary widely. The state you live in may offer additional safeguards that protect the majority of your earnings or bank account balance, or it may offer exemptions in cases like being the head of household with dependent children. Most of the time, creditors must learn about exemptions and ask for these independently. Nonwage garnishment, though not as common, is more unregulated and comes with lesser limitations for lenders.


What you can do about wage garnishment
You are entitled to certain rights during the process of wage garnishment, but in most states, it is your responsibility to be aware of and make use of these rights.
You have to be legally informed about the garnishment.
You can file a complaint when the notice is not accurate information or if you believe that you aren't owed the amount.
Certain types of income, such as Social Security and veterans benefits, are exempt from garnishment as income. However, they may be susceptible to being confiscated .
It is not possible to be fired for a single wage garnishment, but you'll lose the protection when you have multiple garnishments.

If you think the decision was made in error or has caused undue financial harm you may .
What to do when you get a garnishment judgment
Before you do that, take a close look at the judgment carefully to confirm that all of the information is correct. Be sure it's not something you've already paid, and is actually your obligation. If so, you should think about the amount to be taken and what it can mean for your financial situation.
Decide what to do next. If you've not done it before, you may consider consulting an attorney for consumer law to find out what's right for you. There are three choices:
Work out a different deal
Make contact with your creditor. "A lot of consumers underestimate their ability to make a conversation," says Tara Alderete director of enterprise learning at the nonprofit financial counseling agency Money Management International. "Look at your budget, look at how much you owe, how much you can afford and then call the creditor and see if you can work out a payment plan. Creditors and consumers always have that ability."
Challenge the judgment
If you believe the garnishment was executed by mistake, caused undue harm or is being wrongly implemented, you are able to object in court. It is imperative to act swiftly. You may have as few as five days to contest the decision.
Accept the garnishment
You can take care of the garnishment by installments , as the judgment states or pay it in one lump sum. Borrowing money from a relative or taking out a loan to pay off the judgment, which is possible even with the garnishment of the credit file, can provide quick relief from the burden of a long series of payments.
It's embarrassing to have your employer know that you've been sued by a debtor However, it's better to be honest with your human relations manager or department.
"Wage garnishment can create stress at work Therefore, you should be proactive in talking with your employer," Alderete says. "Have an open discussion where you say what's happening and you're not going to let it to turn into a problem."
If wage garnishment creates a financial burden
If you don't see any way to avoid wage garnishment, consider the free assistance of a to discuss your , such as a repayment plan or bankruptcy.
A judgment for garnishment will remain on your credit reports over a period of up to 7 years and can impact your score on credit. But there are a few simple ways to improve your credit score, both before and after wage garnishment.
and adhering to it will help you stay on top of your finances so that you don't get the possibility of another garnishment. Once you've established a budget, you'll be able to use products like an unsecured credit card to work on .



About the author: Sean Pyles is the director of production and host of the NerdWallet's Smart Money podcast. His writing has appeared on The New York Times, USA Today and elsewhere.







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