Wage garnishment occurs when the court orders part of your pay withheld to satisfy a debt you owe. When the court agrees to wage garnishment, your employer will withhold a portion of your pay and send it to the creditor until your debt is completely paid off. Sending extra payments, in addition to the garnishment amount, can help you pay off your debt and end the garnishment sooner.
Creditors can't automatically start garnishing your wages anytime you're behind on payments. Most creditors can’t get permission to garnish your wages without first filing a lawsuit against you and then winning a judgment in that lawsuit. If a certain amount of time passes after that judgment and debt still exists, then a creditor may ask the court for permission to garnish your wages.
Wage Garnishment Limits
The Consumer Credit Protection Act sets limits on how much of your wages can be garnished. This means a creditor can't take your entire paycheck, leaving you without enough money to survive. Instead, a creditor is only allowed to garnish wages from a portion of your "disposable earnings," which are your wages after taxes and qualifying deductions.
The amount of your disposable earnings that a creditor can garnish is determined by calculating the lesser of the following two amounts:
- 25% of your disposable income, if your disposable income is greater than $290
- Any amount greater than 30 times the federal minimum wage
For example, if you make $800 per week after taxes and other qualifying deductions, your maximum wage garnishment would be $200. As of March 21, 2022, the federal minimum wage is $7.25, and 30 times that is $217.50. Subtract $217.50 from your total weekly wages of $800, and you get $582.50. To determine 25% of your disposable income, multiply $800 by 0.25, giving you $200. Since $200 is less than $582.50, the maximum wage garnishment would be $200.
Exceptions to Wage Garnishment Limits
These limits don't apply to garnishments for unpaid tax debts, bankruptcy court orders, child or spousal support, or voluntary wage assignments.
For child and spousal support payments, up to 50% of your disposable income can be garnished if you have another child or spouse to support. Otherwise, your maximum wage garnishment could be up to 60%. If you have to pay more than 12 weeks of back payments, you could be garnished an additional 5% to cover these payments.
Federal agencies can garnish up to 15% of your wages to pay off a defaulted debt owed to the federal government and the Department of Education can garnish 15% to pay off defaulted student loans.
Your state may have different limits on wage garnishment. When the state wage garnishment limits are different from the federal limit, the one that results in the lower garnishment amount is used.
How Salary Deductions Affect Wage Garnishment
The amount of your income that can be garnished is based on a percentage of your disposable income, which is your gross income minus any legally required deductions, including deductions for social security, state retirement systems, unemployment insurance, and taxes.
Deductions that aren’t required by law—like health insurance, 401(k), and charity contributions—are not subtracted from your gross income to determine your disposable income. Instead, these deductions will be taken from your pay after the wage garnishment, further reducing your take-home pay.
If a current wage garnishment is taking up a chunk of your take-home pay, you may be able to adjust your voluntary deductions to add more money to your paycheck.
When Wage Garnishment Is a Hardship
Even though there's a limit to how much your wages can be garnished, the amount could still be so high that it leaves you unable to afford the basic living expenses. If this is true, you may be able to file a claim of exemption to reduce the wage garnishment amount. You might also qualify to be considered judgment-proof.
Bankruptcy is another option for certain types of unsecured debts, but not for student loans, child support, and some tax debts. However, anyone considering a bankruptcy claim should strongly consider the downsides of such an action, including a significant impact on your credit score and the potential loss of property.