Quick snapshot
Wage garnishment is one of the most powerful collection tools available to creditors and government agencies. It can start after a court judgment for consumer debts, or by administrative process for some federal debts (like certain student loans and taxes). Federal law sets floor protections, while state law may provide stronger limits or additional notices. (See the Consumer Financial Protection Bureau and the Consumer Credit Protection Act for details.)
This article explains how garnishments work, legal limits by debt type, immediate steps if you receive a notice, and emergency remedies you can pursue to stop or reduce payroll withholding.
How garnishment works — the process in brief
- Creditor obtains judgment or the agency gives notice. For many consumer debts a creditor must sue and obtain a court order. For certain federal debts (e.g., defaulted federal student loans or unpaid federal taxes) an administrative process can allow withholding without a state court judgment.
- Employer receives a garnishment order or withholding order and must comply. Employers are legally required to withhold the specified amount from your paycheck and send it to the creditor or agency. Failure to comply can expose the employer to liability.
- Disposable earnings are calculated. Garnishments apply to “disposable earnings” — pay after legally required deductions (taxes, Social Security, Medicare). State rules control calculation details.
- You receive notices and limited rights to object. Federal and state laws require notice; you can raise defenses or claim exemptions in many situations.
(Authoritative sources: Consumer Financial Protection Bureau; IRS Publication 594; U.S. Department of Education.)
Legal limits: what the law allows by debt type
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Consumer debts (credit cards, medical bills, other judgments): The Consumer Credit Protection Act (CCPA) sets the federal cap. The general formula is the lesser of 25% of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage (currently $7.25/hr). Stated differently, garnishment cannot take more than a set fraction intended to leave a base living amount. States may impose lower caps or special rules (15 U.S.C. §1673).
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Child support and alimony: Federal law allows higher withholding for support obligations. Current rules permit withholding up to 50% of disposable earnings (or 55% if support is more than 12 weeks in arrears) or up to 60% (or 65% if arrears exist) if the obligor is supporting another spouse or child. Exact percentages and calculation rules are enforced through state child support agencies and the Office of Child Support Enforcement, which may vary by circumstance.
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Federal student loans: The U.S. Department of Education may use administrative wage garnishment (AWG) for defaulted loans. AWG can take up to 15% of disposable pay, and the federal agency must provide notice and an opportunity for a hearing before starting garnishment.
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Federal taxes (IRS): The IRS uses a levy and can take wages through a continuous levy after required notices. The amount is based on an exempt-amount table that factors in filing status and dependents to leave a basic living allowance. The IRS provides Collection Due Process rights and other remedies to dispute or limit levy action.
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State taxes and other government debts: State agencies follow state law for withholding. Military pay or certain benefit payments may have special protections.
Note: Some income streams are non-garnishable for many debt types — e.g., Social Security, Supplemental Security Income (SSI), Veterans’ benefits — though exceptions exist for certain debts such as federal taxes and child support.
Immediate steps if you get a garnishment notice (action checklist)
- Read the notice carefully and calendar deadlines. Notices include a date by which you must respond to challenge the garnishment or claim exemptions.
- Confirm identity of the creditor and reason for garnishment. Match case numbers; verify the court judgment or agency order is current and accurate.
- Calculate the withholding. Ask your employer or the creditor for the calculation so you can confirm disposable pay and the percentage withheld.
- File any required claim of exemption or objection with the court/agency before the deadline. Many states have forms for this.
- Contact the creditor or agency to negotiate. Often you can arrange a lower voluntary payment or a repayment plan that stops the garnishment.
- Gather documentation: pay stubs, proof of dependents, recent bank statements, bills showing hardship — these support exemption claims or hardship negotiations.
- Consider legal aid or an attorney, particularly if your income is near poverty levels or if the garnishment appears unlawful.
In my practice helping clients, early contact with the creditor or agency reduced wage withholding in a majority of cases. Creditors often prefer a negotiated regular payment over the administrative burden of continuous garnishment.
Emergency remedies to stop or reduce garnishments
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File a claim of exemption or motion to quash the garnishment in state court. If you can show the withholding violates statutory limits or causes undue hardship, a judge may reduce or block the garnishment.
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Negotiate directly with the creditor or collection attorney. A quick written offer to pay a reasonable monthly amount can sometimes be accepted and the garnishment lifted.
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For IRS garnishments, request a Collection Due Process (CDP) hearing or apply for an Installment Agreement, Offer in Compromise, or Currently Not Collectible (CNC) status. These options can suspend or stop levies while the application or appeal is pending. Refer to IRS guidance for timelines and forms (IRS Publication 594).
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For federal student loans in default, pursue loan rehabilitation, consolidation, or a negotiated repayment plan with the Department of Education to stop administrative wage garnishment. Rehabilitation or a valid repayment agreement will generally end AWG.
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File for bankruptcy. Certain garnishments stop immediately after you file under the automatic stay (consumer debt garnishments). Note: Child support and some federal tax levies may not stop. Bankruptcy can offer relief but has complex trade-offs — consult a bankruptcy attorney.
Common mistakes and pitfalls
- Ignoring the notice. Deadlines matter. Missing a claim deadline or failing to respond limits your ability to object.
- Not checking state law. State exemptions and procedures vary; some states protect a larger share of earnings than federal law.
- Assuming all income is fair game. Many government benefits and portions of pay are exempt.
- Letting the employer miscalculate. Confirm disposable pay math; require the employer to show how it computed withholdings.
Real-world examples (illustrative)
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A client faced a 25% garnishment after a credit-card judgment. We filed a claim of exemption showing essential monthly expenses and negotiated a reduced voluntary payment with the creditor that replaced the garnishment and improved monthly cash flow.
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A small-business owner received an IRS continuous levy. By providing recent profit-and-loss statements and negotiating an Offer in Compromise, the IRS accepted a reduced settlement and released the levy after the first payment.
These examples reflect typical outcomes when notice deadlines are met and the taxpayer provides clear, organized documentation.
When to get professional help
Seek legal or financial counseling promptly if:
- Your withholding would leave you unable to cover basic housing or medical costs.
- The garnishment is for a federal or complex debt (IRS, federal student loans).
- You believe the judgment or order is in error (wrong identity, debt already paid, statute of limitations or bankruptcy discharged the debt).
Free or low-cost legal help may be available through state legal aid programs and nonprofit credit counseling agencies.
Further reading and resources
- For practical steps to end withholding, see our guide: How to Stop a Wage Garnishment: Options and Timelines.
- To compare garnishments with other collection tools, review: Comparing Collection Remedies: Liens, Levies, Garnishments, and Seizures.
- For IRS-specific wage withholding rules and steps, see: Wage Garnishments: How the IRS Collects from Your Paycheck.
Authoritative references consulted: Consumer Financial Protection Bureau (CFPB); IRS Publication 594; U.S. Department of Education borrower protections and AWG rules; Consumer Credit Protection Act (15 U.S.C. §1673).
Professional disclaimer: This article is educational and does not constitute legal or financial advice. Your situation may involve state-specific rules or facts that change the outcome. Consult an attorney or qualified financial counselor for personalized advice.
