Are Your Wages Being Garnished?

Updated: Jun 28, 2019

I went out for coffee the other day with a friend I hadn’t seen in a while. Expecting to get caught up, instead I heard a distressing story about six months of unemployment followed by a new job, followed by garnished wages for non-payment of child support (because he was unemployed). My friend was just starting to get back on his feet when it felt like the rug was pulled out from under him.

Wage garnishment is when an employer deducts a pre-determined amount of money directly from an employee’s paycheck to pay a court ordered debt. In most cases garnishments go towards

  • Child support

  • Unpaid student loans

  • Taxes

  • Unpaid court costs

However, credit cards, medical bills and personal loans can all be subject to garnishment. Once established, the garnishment will continue until the debt is either paid off or the person finds some other way to resolve the issue.

It turns out my friend had plenty of company in his predicament. According to new ADP research 1 in 14 US workers are having their wages garnished - with child support and students loans the leading causes.

How much is garnished depends on the type of debt you’re dealing with. According to Federal law, creditors are only entitled to 25% of your disposable income. However, 60% of disposable earnings can be directed towards child support, or 50% if you are supporting another child or spouse. 15% can go toward student loans.

According to the article from Nolan Bankruptcy Attorneys linked to above, “If you owe money to the IRS, watch out: The agency can take big chunks of your wages, and it doesn’t have to get a court order first. The amount you get to keep depends on how many dependents you have and your standard deduction amount. Your employer will pay you a fairly low minimum amount each week and give the rest to the IRS.”

Things were not going well for my friend when I met up with him, but just because his wages were being garnished at that time, didn't mean it had to continue indefinitely. People in his situation can take steps to change their circumstances. Before trying any of the options below it’s probably a good idea to have a discussion with a consumer law attorney. You can contact legal aid for help with that.

How garnishments work

If your creditor proceeds with a garnishment (due to an inability to settle the debt or stop it in some other way), your place of employment will be notified of the amount to garnish each pay period and you will begin to see the deduction on your paychecks. Each month, the creditor will reduce your total balance by the amount of money taken from each paycheck.

As with most debts, you'll still have to pay interest on top of the principal balance. A significant interest rate can make a garnishment account much more difficult to payoff. In an ideal world, you'll repay the balance in a relatively short amount of time without encountering too much financial hardship on your part. Unfortunately, for individuals facing a garnishment, this is often not the case. The balance combined with a substantial interest rate often opens the door to financial hardship.

Options for stopping a garnishment

Have a discussion with the creditor

Sometimes a conversation with a creditor can lead to the negotiation of a different deal. Either a smaller garnishment or a debt settlement that clears the matter with a lump sum payments. Some creditors may even accept an installment agreement, which would allow you to make multiple payments to satisfy a settled (reduced) debt.

Challenge the judgement

Always thoroughly review all the documents the court or your employer sends you to ensure you really do owe the debt. Sometimes a creditor will seek payment on a debt that’s already been paid or was discharged through bankruptcy.

If you believe the garnishment was made in error, the wrong amount is being taken out of your paycheck or the creditor didn’t follow the correct proceedings, or paying the garnishment would cause undue financial hardship it can be challenged. As we mentioned earlier, you should consult with a consumer law attorney to ensure you approach the situation appropriately.

Refinance your debt

If you have access to credit, another option to consider is a personal loan or credit card to refinance the debt. You would use the new funds to payoff the account in garnishment, immediately stopping the garnishment (as there is no additional amount to garnish). Some credit cards offer an introductory 0% interest rate which could considerable reduce the total amount you repay.


If you aren't eligible for an exemption claim but still find the garnishment unmanageable, you may want to talk with a bankruptcy attorney about filing a Chapter 7 bankruptcy. Filing for bankruptcy is not something to take lightly, but if your debts are insurmountable, bankruptcy is a final way discharge them and stop garnishment of your wages.

Fortunately for my friend he was able to negotiate a settlement with this ex for back child support. I’m happy to say he’s now back on sure footing with his job and the rest of his life.

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