5 Ways Your Paycheck Can Be Garnished (And What You Can Do About It)

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If your paycheck just got smaller due to someone garnishing your wages, it can be devastating to your budget. Creditors — and the federal government — may have the right to take money straight from your paycheck if you miss too many payments.

But you can protect your income by knowing the legal limits of wage garnishment and by finding ways to avoid it. Here’s a review of how wage garnishment works and what you can do if your wages are being garnished.

What Is Wage Garnishment?

Wage garnishment is when a court order is issued to your employer to withhold money from your paycheck that is sent directly to one of your creditors. This can be for debt owed or back-owed taxes or child support.

Your wages are typically garnished until you pay off what is owed, but there are limits on how much can be taken from your wages. Some types of income are also shielded from wage garnishment.

Types of Court Orders

There are two ways a creditor can win a court order to take your money for paying back a debt you owe: wage garnishment and a bank levy.

• Wage garnishment: Money is taken directly from your paycheck to pay off debts
• Bank levy: A creditor can place a levy on your bank accounts and take money needed to satisfy the debts owed.

Both wage garnishment and bank levies require a creditor to sue you and win a court order to begin collecting on your debts. This usually doesn’t happen until after your account goes into default for nonpayment — typically over the course of months.

Federal wage garnishment for student loans or child support can happen without a court order, though.

Reasons Your Paycheck May Be Garnished

There are several ways your paycheck can be garnished:

• Back-owed taxes: If you owe income taxes and miss your payment deadlines, the U.S. government can garnish your wages to collect.
• Back-owed child support: If you owe child support and haven’t been making payments, your wages can be garnished to make up for the missed payments.
• Back-owed alimony: If you owe alimony from a divorce and haven’t been making payments, your wages can be garnished to make up for the missed payments.
• Federal student loan debt: Federal student loans will follow you forever if not paid off, and if you miss payments and go into default, your wages may be garnished to collect on the debt.
• Behind on consumer debt payments: If you owe credit card debts, medical bills, car loans or any other consumer debts, your creditors can sue you to garnish your wages.

Wage Garnishment Limits

Creditors can’t just take all your money. There are legal limits for how much of your wages can be garnished. Here’s how the limits breakdown by type of debt:

• Consumer debts (including medical bills): Up to 25% of your paycheck. But if you don’t make enough, the limit is the amount your income exceeds 30x minimum wage. For example: If you make $290 per week or more, creditors can take 25%. But if you make less than $217.50, creditors can’t garnish your wages at all. For weekly income between $217.50 and $290, creditors can take all amounts above $217.50.
• Child support and alimony: Up to 50% of your paycheck if you have other dependents. If you don’t have other dependents, wages can be garnished up to 60%. And if you’re more than 12 weeks late in your payments, an additional 5% can be taken.
• Federal student loans: Up to 15% of your paycheck
• Back-owed taxes: Based on your filing status and number of dependents.

How To Protect Your Income From Wage Garnishment

If your wages are currently being garnished, here are a few ways to protect your income and potentially stop the garnishment altogether:

• File a dispute: If you believe there’s inaccurate information or you don’t owe the debts, you can dispute the claim.
• Claim an exemption: If you qualify for a wage garnishment exemption in your state — such as being “Head of Household” — you can file an exemption to decrease or even stop wage garnishment.
• Talk to the creditor directly: If you can work out a deal with your creditor, they may stop garnishing your wages in exchange for a new payment plan with you.
• Work with a credit counselor: Credit counseling agencies negotiate your debts on your behalf and work out payment agreements that you can afford.
• File bankruptcy: As a last resort, you may consider filing bankruptcy to stop wage garnishment and get some of your debts discharged.

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