Overview

Receiving a notice of garnishment is stressful, especially if the notice is incorrect. Whether the order came from a private creditor after a court judgment, a state agency (child support or taxes), or the IRS, you have options to challenge it. Federal laws and state procedures differ, but the basic goal is the same: show documentation or legal argument that the garnishment is incorrect, secure a hearing or administrative review, and obtain release or modification.

Authoritative sources: IRS collections guidance (IRS: Levies and Wage Garnishments – https://www.irs.gov/individuals/tax-levies), and Consumer Financial Protection Bureau (CFPB) guidance on garnishment and debt collection (https://www.consumerfinance.gov/).

Disclaimer: This article is educational and not legal advice. Consult a licensed attorney or qualified tax professional about your specific case.

Why an Incorrect Garnishment Happens

Common reasons you might receive an incorrect garnishment notice:

  • Payments misapplied or recorded incorrectly by the creditor or IRS.
  • Identity theft or mistaken identity (name or SSN mix-up).
  • Debt already paid or discharged (bankruptcy, settled account).
  • Court paperwork errors: wrong party named, wrong judgment amount, or improper service.
  • Employer payroll error (misunderstanding the order).

Understanding the likely cause determines the best response: send proof of payment, file an identity-theft affidavit, or move to vacate a judgment in court.

Immediate actions to take (first 48–72 hours)

  1. Read the notice carefully. Note the issuing agency, the amount, the date, and whether the garnishment is for wages or a bank account. If the notice is a court order, it usually identifies the court and case number.
  2. Confirm the sender. Scammers sometimes fake garnishment notices. Contact the court clerk or the creditor directly using contact details you source independently (not those on the notice) and verify the case number.
  3. Notify your employer or bank. Tell payroll or your bank you’ve received a notice and are disputing it; ask if they can place a temporary hold on applying the funds while you resolve the dispute (employers and banks have different obligations and timelines).
  4. Preserve all documents. Save the original notice, pay stubs, bank statements, receipts, emails, and any other records of payments or communications.

Step-by-step process to challenge the notice

  1. Review jurisdiction and who issued the order
  • For a court-ordered garnishment (most private creditors), you will usually challenge the underlying judgment or file an exemption claim in the court that issued the order.
  • For federal tax garnishments (levies), the IRS must issue specific notices and generally gives a right to a Collection Due Process (CDP) hearing if you received a proper Notice of Intent to Levy. See IRS guidance on rights and remedies (https://www.irs.gov/individuals/levies).
  • For state tax or child-support garnishments follow state-specific administrative appeal rules.
  1. Gather proof

Collect documents that support your claim. Common items:

  • Proofs of payment (bank records, canceled checks, online payment confirmations).
  • Identity documents (driver’s license, Social Security card) if identity theft is suspected.
  • Bankruptcy discharge paperwork, settlements, or letters showing account closure.
  • Employer or payroll records if wages were misclassified.
  1. Send a written dispute

Send a concise, dated dispute letter to the issuer and to any collection agency. Use certified mail with return receipt and keep copies. Your letter should:

  • Identify the garnishment (case number, account number).
  • State the reason for dispute and list evidence enclosed.
  • Request immediate suspension or release of the garnishment until the dispute is resolved.

Sample opening lines:

I dispute the validity of the Notice of Garnishment (Case No. 12345). The debt referenced was paid on 01/15/2024; enclosed are bank statements and a payment confirmation. Please suspend garnishment activity and provide written confirmation of receipt.

  1. File required motions or administrative appeals
  • Court garnishments: file an EXEMPTION CLAIM or a motion to VACATE or MODIFY the garnishment in the issuing court. Many courts have specific local forms — check the court clerk’s office or the court website.
  • IRS: if you received a Notice of Intent to Levy, you generally have 30 days to request a Collection Due Process hearing or request an Independent Office of Appeals review; alternatively, ask the IRS to release a levy if payments were misapplied (IRS: Collection Due Process rights).
  • State agencies: follow the agency’s administrative appeal process (timelines vary).
  1. Ask for a hearing and prepare your case

When a hearing is scheduled, bring originals and copies of all documents, a clear timeline of events, and a written summary of your argument. Be concise and focus on why the garnishment is incorrect or why an exemption applies.

  1. Consider provisional remedies
  • Request a temporary stay or injunction from the court if you can show irreparable harm (often used in urgent cases where payroll or business cash flow is at risk).
  • For IRS actions, consider requesting an installment agreement, an Offer in Compromise, or proof of release if payments were credited to the wrong account.

Common legal defenses and exemptions

  • Payment credited: show proof that the debt was paid in full or in part.
  • Wrong person: prove identity mismatch with SSN, name, or address documentation.
  • Protected income: under the Consumer Credit Protection Act (CCPA, 15 U.S.C. §1673), most wages are protected — garnishment is limited to the lesser of 25% of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage (federal minimum wage = $7.25). Check state laws; many states provide stronger protections.
  • Social Security and federal benefits: many federal benefit payments are protected from garnishment by private creditors; exceptions and offset programs exist for some federal debts — verify on SSA and IRS pages.

Authoritative references: CCPA wage limits (U.S. Code), IRS and SSA pages, and CFPB consumer guides (https://www.consumerfinance.gov/).

What to expect after you file a dispute

  • Temporary pause or employer/ bank delay: sometimes an employer will delay withholding pending clarification, but they are often required by law to follow a valid court order.
  • Hearing date: you may be given a date to present evidence.
  • Possible outcomes: full release of garnishment, reduction of amount, payment plan, or denial of dispute. If denied, you can often appeal.
  • Employer liability: if an employer pays out wages after receiving a valid garnishment order and later the order is found incorrect, the employer can be liable to the employee — this is a complex area; consult an attorney.

Practical templates & checklist

Checklist to send with your dispute:

  • Copy of garnishment notice or court order
  • Payment receipts or bank records
  • ID and SSN (if identity theft is an issue)
  • Correspondence with creditor or IRS
  • Copy of bankruptcy discharge, if applicable

Sample dispute letter (short):

[Your Name]
[Address]
[Date]

Re: Notice of Garnishment — [Case/Account No.]

To Whom It May Concern:

I dispute the validity of the above Notice of Garnishment. The debt was paid on [date]. Enclosed are copies of bank statements and payment confirmations. Please suspend garnishment activity until this dispute is resolved and confirm receipt by mail.

Sincerely,
[Your signature]

When to get professional help

  • You lack the time or ability to gather evidence and meet court deadlines.
  • The garnishment involves wages of a small business owner that threaten ongoing operations.
  • The garnishment is large and could cause long-term financial harm.

If you can’t afford a private attorney, look for legal aid organizations, state bar associations’ pro bono clinics, or low-cost consumer law clinics. For tax-related levies, consult a tax attorney, enrolled agent, or IRS Taxpayer Advocate Service if the IRS process is not resolving the error (https://www.taxpayeradvocate.irs.gov/).

Related resources on FinHelp

Frequently asked practical questions

Q: How long do I have to contest a garnishment? A: Deadlines vary by source. For IRS notices, you generally have 30 days to request a hearing after a Notice of Intent to Levy; for court-ordered garnishments, many states require objection within 10–30 days after service. Start the dispute immediately and verify local deadlines with the issuing court or agency.

Q: Will garnishment hurt my credit? A: The underlying debt and any judgment can harm credit; the garnishment itself is a collection step and may be reported depending on the creditor and reporting practices.

Q: Can my employer fire me over a garnishment? A: Under the federal CCPA, an employer cannot discharge an employee solely because of a single garnishment for one debt, but rules vary and multiple garnishments may create different employer responses. Check state law as some states provide stronger employee protections.

Final notes

Act quickly, document everything, and use the correct legal channel to contest the garnishment. If the error is straightforward (misapplied payment, identity mix-up), a short, well-documented dispute and verification with the issuer will often stop the garnishment. For complex cases (tax levies, multiple creditors, business exposure), get professional help early.

Remember: this page is educational. For tailored legal or tax advice, consult a licensed professional in your state or contact the IRS or state agency directly.