Wage Garnishment

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What is garnishment?
Garnishment is a process by which creditors take a part of your income in order to pay a debt. If you are employed, your employer will be ordered to pay a portion of your wages or salary directly to the court. That money will then be paid over to the creditor.

Do I have to be sued first, before my income can be garnished?
In most cases, yes. Creditors such as hospitals, doctors, credit card or loan companies or banks must file a lawsuit against you and get a judgment before your income can be garnished.

There are a few exceptions, including some tax and student loan cases, in which the government can garnish your income without first going to court. If this happens, you may wish to seek legal advice.

What kind of income can be garnished?
A portion of your earnings may be garnished. "Earnings" include: wages, commissions, rent received, or other income such as dividends. Generally, Social Security, SSI, Veterans benefits, and Railroad Retirement cannot be garnished, nor can certain types of civil service, military and pension benefits. Child support you receive cannot be garnished.

If you've arranged with a bank for the direct deposit of funds from Social Security or the V.A., or have put these governmental benefits into your account, these benefits cannot legally be garnished or seized. BE SURE to tell your creditor, its attorney, and/or the Judge if your bank account has funds from governmental benefits; otherwise, these might be taken by mistake.

How much can be garnished?
There is a formula creditors must follow. Your net (after-tax) income is exempt (protected) up to 30 times the minimum wage per week. If you earn more than this amount, creditors can garnish the amount over the exemption – but only up to one-fourth (1/4) of your net income.

How does the formula work?
Multiply the minimum wage, $7.25 (as of July 2009), by 30, which is $217.50. If your after-tax income per week is less than this, nothing can be garnished.

If your after-tax weekly income is more than $217.50, but less than $290, subtract $217.50 to determine the amount that can be garnished. For example, if your after-tax weekly income is $250.00, the amount which can be garnished is $32.50.

If your weekly after-tax income is more than $290.00, one-fourth of your wages can be garnished. Example: if your weekly income is $320.00, $80.00 can be garnished.

Note that the minimum wage is subject to change by Congress, and these figures may be adjusted accordingly. Note also that these rules do not apply to judgments against you for child support. (More can be garnished to pay child support).

Can more than one creditor garnish me at a time?
Normally not – if one creditor is garnishing the maximum amount allowed by law, other creditors must wait until the first creditor’s judgment is satisfied.

What happens to my employer?
Your employer may be summoned to Court and/or sent papers from the Court. Your employer may be ordered to take money directly out of your paycheck to be sent to the Court.

Can my employer fire me because I have been garnished?
No – you may not be fired just because your wages are being garnished.

Can I be sent to jail because I cannot pay anything?
No – you may not be jailed or fined, just because you have no income that can be garnished. You cannot be ordered to pay the judgment in installments, if the installments are larger than those under the garnishment formula.

However, you may be punished if you don't go to Court, if you hide assets or wages, or if you refuse to pay a lawful garnishment Order.

Can I set up payments with the creditor?
Yes. If you want to do this, call the creditor or its attorney before your hearing date. The attorney may allow you to pay the judgment in installments instead of going to Court. This could stop your employer from becoming involved. Be sure that the creditor or its attorney gives you proper credit for all payments you make, and keep all receipts and a record of the balance due.

Some creditors may also accept a lump-sum settlement to satisfy the Judgment. If you agree to pay a lump sum, be sure to get a release ("satisfaction of judgment") from the creditor or Court.

Reviewed August 2009