Gerri Detweiler, March 2, 2022
What happens if you find your wages garnished without notice?
In most cases, your employer does not have to specifically notify you before your wages are garnished. But you do have rights when it comes to wage garnishment and it’s important to understand those rights and your options.
We’ve heard many complaints from people who found out after they got their paychecks that their wages were being garnished. Here’s just one of those comments:
Wage garnishment is a legal process where wages are withheld by an employer to pay a debt. It is also sometimes referred to as “wage assignment.” There are some federal restrictions on wage garnishment, and state laws may restrict it as well. These restrictions are discussed below under the section about wage garnishment laws.
Getting your wages garnished without notice is a punch in the gut. You're already struggling with your debt and now it's even harder to pay them because you have less income! The question we often hear is, “Does an employer have to notify the employee of garnishment?"
Here are three important things you need to know:
Wage garnishment usually only happens in one of three circumstances:
In this article we will focus on the first type of wage garnishment: when you have your wages garnished because you were sued in court over a consumer debt. This article does NOT discuss wage garnishment for past due child support or federal debts.
Here’s how the wage garnishment process works for consumer debts:
Ordinarily, before your wages can be garnished, the creditor to whom you owe money must sue you and win a judgment against you in court. If the creditor gets the judgment, it can ask the court for the right to take a portion of your wages as a means of collecting on the judgment as long as that’s legal in your state. This is usually under a process called Request for Garnishment on Wages, or something similar. If successful, a Writ of Garnishment then gives them permission to garnish your wages. They then contact your employer.
Important: Your wages can be garnished without you being sued in court if you owe back taxes or have fallen behind on federally-guaranteed student loans.
When you are sued, you must be legally notified of the lawsuit so that you can respond to it and/or show up in court to defend yourself. If you do not appear in court for the hearing, the judge will probably issue a default judgment against you. The creditor may then have to go to court to get a Writ of Garnishment. It is during these steps that you are notified of the action being taken against you. A separate notice that your employer is about to garnish your wages isn’t likely required.
If you were not legally notified about the lawsuit that resulted in the wage garnishment, you may have grounds for stopping the garnishment. However, once the first garnishment is halted, the creditor may sue you again making sure that you are formally notified of the lawsuit this next time and then get permission to garnish. If you were not formally notified about the lawsuit, contact a consumer law attorney right away.
If you don’t understand why your wages are being garnished, here’s what to do:
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The federal law that protects consumers in the case of wage garnishment by an employer is Title III of the Consumer Credit Protection Act (CCPA). This law protects a certain portion of your income (but not all of it) from garnishment.
Title III limits the amount of earnings that may be garnished in any workweek or pay period to the lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the Federal minimum hourly wage. This limit applies regardless of how many garnishment orders an employer receives.
The federal minimum wage is now $7.25 per hour, so 30 times that is $217.50.
Disposable earnings aren’t legally defined as your “take-home pay” although they may be similar. Instead it is the amount of earnings (“income”) left after legally required deductions (e.g., Federal, state and local taxes; the individual's share of Social Security, Medicare, and unemployment insurance taxes; and contributions to state employee retirement systems required by law) have been made. Deductions not required by law (e.g., union dues, health and life insurance premiums, and charitable contributions) are not subtracted from earnings when the amount of disposable earnings for garnishment purposes is calculated.
This chart may help you understand these limits:
MAXIMUM GARNISHMENT OF DISPOSABLE EARNINGS (GENERALLY) BASED ON CURRENT FEDERAL MINIMUM WAGE OF $7.25 PER HOUR
These limitations do not apply to certain bankruptcy court orders, or to garnishments to recover debts due for state or federal taxes, and different limitations apply to garnishments pursuant to court orders for child support or alimony. This article is focused on wage garnishment by employers for private debts.
State laws may also protect you. Four states-- North Carolina, Pennsylvania, South Carolina or Texas-- don’t allow wage garnishment for consumer debts such as credit cards, car loans etc. Note, however, it may be possible for a creditor to get an order for garnishment in another state (where legal) and request an employer in one of these states to enforce it. Other states may restrict the amount that can be garnished.
Your State Department of Labor will be able to provide you with information about state wage garnishment limitations. Your state attorney general’s office may provide information and assistance with complaints as well.
Also, Social Security benefits are not considered wages and Social Security benefits are generally exempt from garnishment for consumer debts like credit card debt, auto loans etc.
Can you stop wage garnishment once it starts? The short answer is, “yes,” but you’ll often need legal help.
Not all wage garnishment orders are correct but once wage garnishment has started it’s become a legal matter and you will likely need legal help to stop it.
You won’t generally find “wage garnishment attorneys.” Instead, the type of attorneys who help debtors include consumer law attorneys and/or consumer bankruptcy attorneys.
If your wages are being garnished by your employer for a debt, you should at least talk to a consumer bankruptcy attorney. Filing for bankruptcy can often stop wage garnishment. It may help you get rid of other debt payments you can’t afford as well.
If your wages are being garnished for taxes, you’ll want to see if you can get on a payment plan with the IRS (or your taxing authority if you owe state taxes). You may also be able to work out a settlement to resolve the debt by paying less than you owe.
If your wages are being garnished for back due child support or spousal support payments, you’ll have to get your child support order modified by a judge. You’ll find helpful information for dealing with child support you can’t pay here.