What Is Garnishment?
Garnishment is a legal process by which a creditor with a court judgment can collect money directly from a debtor's paycheck or bank account. Federal law limits wage garnishment to 25% of disposable earnings or the amount above 30 times the federal minimum wage, whichever is less. Some states impose stricter limits, and four states — Texas, Pennsylvania, North Carolina, and South Carolina — prohibit most wage garnishment for consumer debts entirely.
Key Facts
- Federal law (Consumer Credit Protection Act, 15 U.S.C. § 1673) caps wage garnishment at 25% of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage ($217.50/week at $7.25/hr), whichever is less
- Four states prohibit most private wage garnishment entirely: Texas, Pennsylvania, North Carolina, and South Carolina — though federal debts like taxes and student loans can still be garnished in these states
- Bank account garnishment (levy) has no federal cap — a creditor can potentially freeze and seize the entire account balance, though many states protect minimum balances and exempt funds like Social Security
- Employers cannot fire an employee for a single wage garnishment under federal law (15 U.S.C. § 1674), but no federal protection exists against termination for multiple garnishments
- The American Distress Index currently reads 56.75 (Elevated zone) — rising delinquency rates across credit cards, auto loans, and mortgages increase the downstream volume of accounts that reach the judgment and garnishment stage
Live Data
How Does Wage Garnishment Work?
Wage garnishment follows a specific legal process:
- Judgment: The creditor must first sue you and obtain a court judgment confirming you owe the debt. Without a judgment, no garnishment can occur (with limited exceptions for child support, taxes, and federal student loans).
- Garnishment order: The creditor obtains a writ of garnishment from the court and serves it on your employer. The order directs your employer to withhold a portion of each paycheck.
- Employer compliance: Your employer is legally required to comply. They calculate your disposable earnings (gross pay minus legally required deductions like taxes and Social Security), apply the garnishment percentage, and send the withheld funds to the creditor.
- Duration: Garnishment continues until the judgment is satisfied in full, you negotiate a settlement, or you file bankruptcy (which triggers the automatic stay).
How Is the Garnishment Amount Calculated?
Federal law applies a two-part test, and the lesser amount is withheld:
- Test 1: 25% of disposable earnings
- Test 2: The amount by which disposable earnings exceed 30 times the federal minimum wage ($7.25/hr × 30 = $217.50 per week)
Example: If your weekly disposable earnings are $400, Test 1 = $100 (25% of $400) and Test 2 = $182.50 ($400 − $217.50). The garnishment would be $100 (the lesser amount). If your disposable earnings are $250, Test 1 = $62.50 and Test 2 = $32.50 — so only $32.50 can be garnished.
If your disposable earnings are $217.50 or less per week, your wages cannot be garnished at all under federal law.
What Are the Exceptions?
Several types of debt have different garnishment rules that bypass the standard process:
- Child support/alimony: Up to 50% of disposable earnings if supporting another family, 60% if not. Add 5% for arrears over 12 weeks. No court judgment needed — income withholding orders are automatic.
- Federal student loans: The Department of Education can garnish up to 15% of disposable earnings through administrative wage garnishment — no court judgment required. Borrowers get 30 days' notice and the right to a hearing.
- Federal/state taxes: The IRS can issue a continuous levy on wages without a court order, using tables that determine exempt amounts based on filing status and dependents.
- Bankruptcy: Filing bankruptcy triggers an automatic stay (11 U.S.C. § 362) that stops most garnishments immediately. Chapter 7 can discharge the underlying debt; Chapter 13 can restructure it into a repayment plan.
What About Bank Account Garnishment?
Bank account garnishment (also called a bank levy or attachment) works differently from wage garnishment:
- The creditor serves a garnishment order on your bank, which freezes the account
- There is no federal 25% cap — the entire non-exempt balance can be seized
- Many states protect certain funds automatically: Social Security, VA benefits, SSI, and other federal benefits are generally exempt under 31 CFR Part 212
- Some states protect a minimum balance (e.g., New York exempts the greater of $3,600 or 240 times the state minimum wage)
- Joint accounts can be partially protected if one owner is not the judgment debtor
The key difference: wage garnishment takes a percentage of ongoing income; bank levy takes a lump sum from existing funds.
How to Respond to a Garnishment
If you receive a garnishment notice:
- Check the calculation: Verify your employer is using the correct disposable earnings formula. Errors in calculating deductions can result in over-garnishment.
- Claim exemptions: File an exemption claim with the court within the deadline (often 10-30 days). Exempt income includes Social Security, disability benefits, and unemployment insurance.
- Negotiate: Contact the creditor's attorney to discuss a voluntary payment plan. Creditors sometimes accept reduced payments to avoid the administrative cost of garnishment.
- Consult an attorney: Legal aid organizations can help with exemption claims and may identify procedural errors that could invalidate the garnishment.
State-by-State Variations
Garnishment protections vary dramatically by state. Four states prohibit most private wage garnishment entirely, while others set limits well below or above the federal 25% cap. Bank account exemptions also vary widely.
| State | Key Difference |
|---|---|
| Texas | Prohibits wage garnishment for consumer debts — one of only 4 states with this protection. Only child support, taxes, and student loans can be garnished. Bank accounts are also heavily protected under the Texas Property Code. |
| Pennsylvania | No wage garnishment for most consumer debts under 42 Pa.C.S. § 8127. Exceptions: taxes, child support, student loans, and landlord judgments over $10,000. Bank accounts can be garnished. |
| New York | Limits wage garnishment to 10% of gross wages or 25% of disposable earnings minus 30× minimum wage — whichever is less. Protects $3,600 minimum in bank accounts (CPLR § 5205). |
| California | Limits garnishment to 25% of disposable earnings or the amount above 40× state minimum wage ($16/hr = $640/week), whichever is less — more protective than federal law due to higher minimum wage. |
| Florida | Heads of household earning $750/week or less are completely exempt from wage garnishment under Fla. Stat. § 222.11. Non-heads-of-household follow the federal 25% cap. Retirement accounts fully protected. |
Frequently Asked Questions
Can my wages be garnished without a court judgment?
For most consumer debts (credit cards, medical bills, auto loans), no — the creditor must sue you and win a judgment first. Three exceptions: child support (automatic income withholding), federal student loans (administrative wage garnishment after 30-day notice), and federal/state taxes (IRS levy authority). Mortgage deficiency judgments also require a court order.
Can I be fired for having my wages garnished?
Federal law (15 U.S.C. § 1674) prohibits employers from firing an employee for a single wage garnishment. However, this protection does not cover multiple garnishments from different creditors. Some states extend protection to multiple garnishments — check your state law.
Is Social Security protected from garnishment?
Yes, with limited exceptions. Social Security benefits are protected from most private creditor garnishments under 42 U.S.C. § 407. However, the government can garnish Social Security for federal taxes, federal student loans, and child support/alimony. Banks must automatically protect up to 2 months of direct-deposited federal benefits.
How do I stop a wage garnishment?
Options include: filing an exemption claim with the court (for exempt income like disability), negotiating a payment plan with the creditor, paying the judgment in full, or filing bankruptcy (which triggers an automatic stay). Filing Chapter 7 can discharge the underlying debt; Chapter 13 restructures it into an affordable plan.
What is the difference between garnishment and a levy?
Wage garnishment takes a percentage of ongoing paychecks over time. A bank levy (or bank garnishment) freezes and seizes a lump sum from your bank account. The federal 25% cap applies to wages but not to bank levies. Both require a court judgment for consumer debts.