Grounds for Objection to Wage Garnishment

When a judgment creditor files a wage garnishment against you, you may have grounds to challenge it (called objecting to the wage garnishment). The types of objections you can raise against a wage garnishment depend on your circumstances, federal law, and the laws of your state.

Read on to learn what a wage garnishment is, and some common grounds for challenging its legality.

What Is Wage Garnishment?

If a creditor sues you and gets a judgment, it can come after your income and assets to get paid. Often, judgment creditors can take part of your employment income – this is called a wage garnishment. To do this, the judgment creditor serves a wage garnishment order on your employer, and then your employer must withhold money from each paycheck and send that money directly to the creditor. (For more details on the wage garnishment process, see Wage Garnishments.)

Grounds for Objection to Wage Garnishment

If you get notice of a wage garnishment, you may be able to challenge it. Here are some of the legal reasons that you can object to a wage garnishment.

The Creditor Is Taking More Than Is Allowed Under Wage Exemption Laws

Under state and federal law, you are entitled to exempt (or keep) a certain amount of your income, which cannot be grabbed by your creditors. You must claim your exemptions to prevent a judgment creditor from taking more than it is allowed by federal and/or state laws.

Federal Limits on Wage Garnishment

Under the Consumer Credit Protection Act, a judgment creditor can only garnish the lower of:

• 25% of your disposable earnings (gross pay less taxes and mandatory deductions), or
• your disposable earnings less 30 times the federal minimum wage.

The key to calculating the proper exemption amount under the CCPA is to understand that mandatory deductions are only those deductions that your employer is legally required to withhold from your pay. Social security and federal, state and local taxes are required deductions. Deductions for insurance, savings plans, and charitable contributions are not.

State Limits on Wage Garnishment

Laws vary from state to state as to the type and amount of exemptions available in wage garnishments. Many states do not offer more exemptions than what the CCPA provides. Other states, like Illinois, expand the exemption by allowing creditors to take only 15% of your disposable income.

To learn more, see Calculating Wage Garnishment Limits.

Some State Laws Prevent Most Wage Garnishments

Some states prevent certain types of creditors from garnishing you at all. For instance, in Pennsylvania and North Carolina, your wages can only be garnished to repay only a handful of special judgments, like state taxes, child or spousal support, and student loans. Your wages cannot be garnished to pay a credit card judgment.

Head of Your Household Exemptions

If you are the main source of financial support for your family, you may be able to claim a head of household exemption. Not every state has a head of household exemption, and those that do differ on the amounts of this special exemption. If you live in a head of household state, you could exempt upwards of 90-100% of your earnings. (To learn more, see Head of Household Exemption in Wage Garnishments.)

Exemption Limits for Certain Debts

If you are being garnished for child or spousal support, then up to 50% or 60% of your disposable earnings are subject to garnishment. Your exemptions are also limited in cases where you are garnished for federal taxes or student loans.

You Are Self-Employed

If the income that the judgment creditor is seeking to garnish comes from self-employment, then your earnings may not be subject to the wage garnishment. It will depend upon whether the laws of your state include self-employment income as part of the earnings that a creditor can attach by wage garnishment.

But be careful. By objecting to the wage garnishment on self-employment grounds, you may just be inviting the creditor to file a non-wage garnishment against you instead. Depending on your circumstances, a non-wage garnishment may be more severe because you may not be entitled to the same income exemptions that you would receive as an employee, especially if your state has generous exemptions.

In this situation, you might want to consider other options:

• settle with that creditor
• claim your wage exemptions (if the end result is more favorable to you), or
• pursue other objections, if available.

For more information, see Can Creditors Get Your Income If You Are Self-Employed?

The Creditor Followed Improper Garnishment Procedure

Before a judgment creditor can garnish your wages, it must follow certain procedures. That may include providing you with written notices and an opportunity to set up a payment plan. Or you may have been improperly served with the garnishment papers. If the judgment creditor did not give you proper notice, then you can raise this as an objection.

You Have Paid or Are Currently Paying the Creditor

A judgment creditor is not entitled to a double payment or another windfall. You can object to the garnishment if:

• you previously paid the judgment
• you are currently making payments under a voluntary or court-ordered payment plan, or
• the judgment creditor did not give you proper credit in its calculations for other post-judgment payments you made

You Are Being Garnished by Another Creditor

In most cases, your wages can only be garnished by one creditor at a time. Or, if another creditor is garnishing only 10% of your disposable earnings, then this judgment creditor cannot garnish you for more than the remaining maximum percentage allowed under state or federal law, such as 15%. If this judgment creditor seeks to garnish you for more than what you are allowed to exempt, then you should object to the garnishment.

You Filed for Bankruptcy

If you have filed bankruptcy, then the automatic stay prevents creditors from taking any further collection action against you. This includes the wage garnishment. A judgment creditor must cease pursuing the garnishment upon receiving notice of the bankruptcy.

Disputing the Judgment

If you object to the judgment itself, and did not appeal it on time, objecting to the wage garnishment is ineffective. That is because the court will only consider issues related to the wage garnishment itself and presumes that the judgment is legal. If you dispute the judgment (such as improper service of process), then you should consult with an attorney as soon as possible. There may be grounds to vacate that judgment, but you may have a limited time to do so, and it is a very difficult process. It may not immediately stop the garnishment and you may have to post a bond or take other action.

To learn how to object to a wage garnishment, see Stopping a Wage Garnishment Without Bankruptcy.