Wage garnishment can be a difficult process to go through, especially when you are already struggling to make ends meet. Your employer may start the garnishment process by taking money directly out of your paycheck to repay your creditors, debt collectors, or collection agencies, which can put additional strain on your finances. However, you do have rights, and there may be ways to lessen or stop wage garnishments altogether.
Wages: When Are They Garnished?
If you fall behind on a payment, your creditor’s bankruptcy attorney will usually do wage garnishments as their first step. However, if other collection efforts or methods have failed or if your debt is approaching the statute of limitations, wage garnishment may be the creditor’s best option.
Creditors may try to recoup their money by repossessing or foreclosing on your bank account or property, obtaining a money judgment, and then selling the property. Or, they could garnish your wages until you’ve paid the remaining debt.
Most creditors will need to file for bankruptcy or sue you and obtain a judgment from the court to garnish your wages. The default judgment amount will state the amount of money you owe, which could include the original debt plus interest and fees.
If you have unpaid student loans, back taxes, alimony, or child support, you may be subject to administrative wage garnishment (AWG). With AWG, your wages can be garnished without a court order.
Stopping Wage Garnishment

If your wages are being garnished, there are several ways to keep all or part of your paycheck. One option is to consult with an attorney who can help navigate the laws and protect your consumer rights. The nonprofit Legal Services Corporation can assist with finding low-cost or free legal aid.
1. Negotiate With Your Creditor
You may be able to see credit counselor to negotiate a lower monthly payment with the creditor. You and creditor might also be able to see bankruptcy attorney to negotiate a debt settlement and pay off the debt in full with a lump sum payment. Taking these steps can help you manage your debt and avoid financial difficulties.
2. Try A Claim of Exemption
There may be a way to stop or reduce the amount that is taken from your paychecks. Depending on state law and certain circumstances in your personal and financial circumstances, it may be possible to file a claim of exemption financial hardship.
3. Fight the Garnishment
If more money is being taken from your paycheck than is appropriate, or if the creditor did not follow proper procedures. Additionally, review any documents that the court or your employer sends to verify that the debt is owed. If a creditor is trying to a garnishment order collect a debt that has been paid or discharged in bankruptcy, this could be caused to stop the wage garnishment or order in process and clear the debt.
4. Refinance Or Consolidate Your Debt

Debt consolidation or refinancing can be a great way to get your finances back on track. If you have fallen behind on your bills and your wages are being garnished, you may still be able to qualify for a new loan. A secured loan, such as a home equity loan or home equity line of credit, could help you pay your debt payments, off your creditors and stop the wage garnishment. However, this option comes with the risk of losing your home if you can’t repay the loan. Carefully consider all your options before making a decision.
5. Get on a Payment Plan
Money Management International is one such organization that can negotiate your financial obligations with your creditors on your behalf. With their assistance, you and other creditors may be able to set up more manageable payment plans that are monitored and overseen by the counseling organization rather than the creditor or courts.
6. Bankruptcy Filing
When you’re buried in debt, it can feel like there’s no way out of bankruptcy can. But sometimes, filing for bankruptcy is the best option. It can stop a wage garnishment immediately and get rid of underlying debts. A qualified bankruptcy attorney can help you figure out if a bankruptcy filing is right for your financial situation now.
Limitations On Wage Garnishment

Most people are unaware that the government has strict limits on what types of income can be garnished and how much money can be garnishment order taken out. For the most part under federal law, the following types of income cannot be garnishment or touched:
- Child Support
- Unemployment Insurance Benefits
- Supplemental security income (SSI)
- Temporary Assistance for Needy Families (TANF)
- General Assistance
- Alimony/maintenance
- Food stamps
- Veterans’ benefits
- Retirement, dependent/survivor benefits, and Social Security Disability
There are certain types of income that may be exempt from wage garnishment, depending on federal and state laws. For example, your disposable income (the money you have left after taxes and mandatory deductions are taken out of your paycheck) may only be subject to wage garnishment or amount to a certain percentage of a wage garnishment amount, if you owe money for child support or alimony.
- Consumer debt: It’s no secret that many Americans are in debt. A recent study found that nearly 40% of people in the U.S. have some form of consumer debt.
- If you’re in debt and looking for a way out, creating a budget and sticking to it is one of the best things you can do.
- Child support or alimony: If you’re more than 12 weeks behind on your payments, you may be able to increase your limit by an additional 5 percent.
- Federal student loans: Disposable income is the money you have left over after you’ve paid your taxes.
- Back taxes: At least 15 percent of your income.
The U.S. Department of Labor has a fact sheet that provides several examples of how federal limits on pay work. These examples can help you understand the limits better. Remember, these are only the federal minimum wage limits. Some state laws may have stricter limits on wages than federal minimum wage and may protect a larger portion of your pay.
FAQs
Will bankruptcy stop wage garnishment?
Yes, filing for bankruptcy can stop wage garnishment. When a person declares bankruptcy, the court issues an automatic stay, which prevents creditors from collecting on their debts, including wage garnishment. The automatic stay applies to both secured and unsecured debts, and it lasts until the bankruptcy is finalized. However, it is important to note that certain types of debts, such as child support and alimony payments, are not affected by the automatic stay and wage garnishment may continue even after filing for bankruptcy.
Glossary
Wages garnished
Wages being taken from an employee’s paycheck to satisfy a debt.
Student loan debt
Student loan debt is a growing problem in the US, with over 44 million Americans having some form of it. It can be difficult to manage and can have long-term effects on personal finances.
Federal student loan
Federal student loan – Government loan offering money to students to help pay for college costs.
Legally required deductions
Legally required deductions must be taken out of paychecks for taxes, insurance, retirement savings, and other items.