Glossary term
Wage Garnishment: Creditors Take Pay
Short answer
Wage garnishment is when a court orders your employer to take part of your paycheck. The employer sends it to whoever you owe money to. For most consumer debts, the creditor has to sue you and win in court before this can start.
Why it matters
Federal law protects part of your paycheck no matter where you live. Under the Consumer Credit Protection Act, there's a cap on how much can be taken for consumer debts. The cap is whichever amount is smaller: 25% of your disposable earnings, or the amount your weekly pay goes over 30 times the federal minimum wage.
Many states protect even more than that federal floor. Some states barely allow wage garnishment for consumer debts at all. Social Security and certain federal benefits are generally safe from this kind of garnishment.
A few debts work differently. Taxes, federal student loans, and child support can be garnished without a lawsuit, and the limits for those are different. A garnishment notice usually comes with paperwork for claiming exemptions. The deadlines on that paperwork matter, since missing one can cost you the exemption.
Example
A card issuer sues Nora and wins a judgment against her. It serves a garnishment order on her employer, who starts withholding a slice of each paycheck, up to the legal limit. Nora checks her state's rules and finds they shield more pay than the federal floor does.
She files the exemption claim form before its deadline. Her Social Security income generally can't be touched for this kind of debt. A bankruptcy filing would generally pause the garnishment while the case moves forward.
Terms used on this page
Guides that use this term
- Wage Garnishment for Consumer DebtHow wage garnishment works for consumer debt, the federal limits on how much can be taken, which income is protected, and how exemption claims generally work.
- Default Judgments: What They AreWhat a default judgment is, what creditors can do with one, how people find out too late, and why motions to set aside exist — in plain English.
- The Automatic Stay: Bankruptcy's PauseWhat the automatic stay stops the moment a bankruptcy is filed — garnishments, lawsuits, foreclosure sales — what it doesn't stop, and how it can be limited.
Sources
This page is based on the following official and authoritative sources. Always check the source itself for the most current rules.
Educational information — not advice
This topic involves court deadlines and rights you can permanently lose.
This page provides general educational information about credit, debt, and consumer protections. It is not legal advice, financial advice, or credit repair services, and reading it does not create any professional relationship. Laws, procedures, deadlines, and dollar amounts vary by state and change over time.
Before acting or deciding not to act, strongly consider consulting a licensed attorney in your state. If cost is a concern, legal aid organizations may help for free. See our full disclaimer.