Will Interest Accrue on a Wage Garnishment?
If your wages are being garnished to pay off a judgment, interest will accrue on the principal balance during the garnishment.
Usually, when a creditor obtains a judgment against you, it includes interest on the amount of the judgment. Interest will start to accrue on the date the judgment was entered by the court. That interest will continue to accrue until the judgment is paid in full.
When a creditor garnishes your wages, the garnishment continues until the debt is paid in full. When the creditor receives a payment from your employer, it may be allowed to apply the payment towards outstanding court and administrative fees (and attorney fees, if allowed) first, then accrued interest, then the principal balance. Interest will continue to accrue on the unpaid principal balance until the entire judgment is paid off.
Most judgment creditors are required to file a statement or report with the court, usually at least once a year, that accounts for the money it garnished from your earnings and how it applied those payments. You should also be able to get an updated accounting from the creditor if you request it.
Laws vary by state on what a creditor can and cannot do with regard to garnishing your income. For more information, visit the Nolo section on Wage Garnishment and Attachments.