economy
What wage garnishment rules should borrowers know now?
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TL;DR
- Federal law limits wage garnishment to 25% of disposable earnings or the amount exceeding 30 times the federal minimum wage.
- Certain debts such as federal student loans, taxes, child support, and alimony may be garnished without a traditional court judgment and can have higher limits.
- State laws can provide additional protections and stricter limits on wage garnishment compared to federal law.
- Certain types of income, including Social Security, SSI, and veterans benefits, are protected from garnishment, but can be complicated once deposited in a bank account.
- Borrowers must be notified before most wage garnishments begin, offering an opportunity to dispute the debt, challenge the amount, or claim exemptions.
- Federal law protects employees from being fired for a single wage garnishment order, but multiple garnishments may not have the same protection.
- Options to regain control after garnishment begins include negotiating a settlement, setting up a payment plan, consolidating debt, or enrolling in a debt relief program.