New York State Wage Garnishment Laws: Your Complete Guide

Is Wage Garnishment Legal in New York?

Yes. Wage garnishment is legal in New York, but most creditors must first sue you and get a money judgment against you. There are also limits to how much money creditors can take from your paycheck.

Anyone you owe money to can qualify as a creditor, including debt collectors, credit card companies, banks, auto lenders, government agencies, taxing authorities, and even your business partner or spouse. Most creditors will need a judgment to garnish your wages, but New York allows some creditors to garnish your wages without a judgment for certain kinds of debts (more on that below).

How Debt Collection Lawsuits Lead To Wage Garnishment

If a creditor brings a debt collection lawsuit against you and presents evidence that you owe them money, the judge can enter a judgment against you. A judgment is a court order to pay the debt. 

If you don’t respond to the lawsuit, the creditor will win a judgment against you by default. This is called a default judgment. Once a creditor wins a judgment against you, they can attempt to garnish your wages.

Most debt collection lawsuits in New York lead to default judgments. So one of the most powerful things you can do to stop wage garnishment is respond to the lawsuit against you. If you do, you may be able to win the lawsuit and avoid wage garnishment altogether.

Legal Terms To Know

Legal terms often feel like a foreign language. Here are some key terms you might encounter:

• Judgment creditor: A creditor who has a judgment against you is called a judgment creditor.

• Judgment debtor: The person who is ordered to pay is called the judgment debtor. 

• Judgment debt: The amount you’re ordered to pay is called the judgment debt. 

• Income execution: A judgment creditor can ask the judge to issue an income execution. An income execution is a court order requiring your employer to withhold money from your paychecks to pay the judgment debt. 

Who Can Garnish Your Wages Without a Court Judgment?

Creditors pursuing public debts or family debts can typically garnish your wages without a court order. Public debts and family debts are also subject to different garnishment limits than private debts.

Public debts include most debts owed to a public or governmental entity, such as:

• Past-due state or federal income taxes

• Other past-due state or local taxes, such as business tax or property tax

• Defaulted federal student loans

• Fees, fines, or other debts owed to the federal, state, or local government

Family debts include court-ordered child support, alimony, and related debts. Wage garnishments for past-due family support obligations (sometimes called domestic support obligations) don’t require a separate judgment. 

Current (not past-due) child support and alimony obligations aren’t technically debts, but they can be withheld from your pay automatically as part of the support order without a separate garnishment order. 

How Much of Your Wages Can Be Garnished in New York for Private Debts?

Debt that isn’t public debt or family debt is called private debt. Credit card debt, medical bills, bank loans, and private student loans are examples of private debts. 

New York state laws limit how much a creditor can garnish from your wages. In general, from each paycheck, a creditor can take either 10% of your gross income or 25% of your disposable income, whichever amount is less.

Gross income is your income before any deductions. Disposable income is your pay after subtracting all legally required deductions like Social Security, unemployment insurance, and state and federal income taxes.

There’s one important caveat here: The garnishment must leave you with at least 30 times the state minimum wage in weekly earnings (in other words, minimum wage times 30 hours).So if you live in New York City, where the minimum wage is $15 (in 2023), a garnishment can’t leave you with less pay than $450 per week.

If you don’t earn at least 30 times the state minimum wage each week, your earnings can’t be garnished. 

How Much of Your Wages Can Be Garnished for Tax Debt, Court-Ordered Support, and Student Loans? 

Tax debt, court-ordered support (such as child support, alimony, or spousal support), and defaulted federal student loan debts aren’t private debts. Creditors don’t need a court judgment to garnish your wages for these types of debts. Public debts and family debts are also subject to different garnishment limits than private debts. 

Court-Ordered Support Garnishment Limits

For past-due family support debts, your employer can withhold up to 60% of your disposable income if you’re not currently supporting any other spouse or children. 

If you are currently supporting a different spouse and/or child(ren) (not the ones who are owed past-due support), up to 50% of your disposable earnings can be withheld. 

If the support payments are more than 12 weeks in arrears (past due), an additional 5% of your disposable income can be withheld. This raises the maximum amount of withholding to 65% and 55%, respectively.

Tax and Student Loan Debt Garnishment Limits

If you owe unpaid taxes, the government can garnish your wages without a court order. For federal taxes, the federal government determines how much of your income is exempt (protected) from garnishment based on a formula that considers your income and family size. Exemptions are outlined on this table from the IRS.

The U.S. Department of Education can garnish up to 15% of your disposable income for defaulted student loans. This amount is subject to the same cap as private debt withholding — you must be left with at least 30 times the minimum wage each week. 

Can More Than One Creditor Garnish Your Wages?

Technically, yes. But if more than one creditor tries to garnish your wages at a time, usually only the first creditor will actually receive any withholding. This is because the maximum deduction limits apply no matter how many income executions are issued. Typically, the total amount of allowed withholding will go to the first creditor until that debt is paid.

How Long Does Wage Garnishment Last?

Once the income execution begins, your employer will continue withholding money from each paycheck until either:

• The judgment debt, including any accrued interest, is paid in full.

• You’re no longer employed there.

• Another court order directs them to stop the withholding — for example, an order vacating the judgment or an order from a bankruptcy court.

Income Exempt From Wage Garnishment in New York State 

Under New York law, several income sources are exempt, or protected, from being garnished. This list doesn’t include ongoing wages, so these exemptions usually won’t affect an income execution issued to your employer. But if a creditor tries to levy your bank account instead of or in addition to garnishing your wages, your account is protected if it contains money from an exempt source. 

Some examples of exempt income sources in New York include:

• Payments received from the Social Security Administration or Veterans Affairs

• Court-ordered spousal support or child support you receive

• Unemployment benefits

• Workers’ compensation benefits

• Disability benefits

• Benefits from public assistance programs

You can view a full list of exempt income sources on the New York State Unified Court System’s website. If your employer receives an income execution and you believe some or all your income is exempt, you can file an exemption claim form with the court that issued the execution.

Can You Be Fired for Having a Wage Garnishment?

Both federal and New York state laws make it illegal for your employer to fire you, withhold a pay raise, or pass you over for a promotion if you have one income execution in place. These state and federal protections don’t apply if you have more than one income execution.

How To Stop Wage Garnishment With Bankruptcy

Filing bankruptcy is one of the only ways to effectively stop wage garnishment. If you’re dealing with or anticipating an income execution, you may want to get legal advice from an experienced bankruptcy attorney or seek legal aid. Many attorneys offer a free consultation. You can also seek credit counseling to get a sense of your options for getting your finances back on track. A good credit counselor can also help you decide if bankruptcy is the right option for you.

Let’s Summarize…

Most of the time, a creditor must sue you and get a judgment against you to garnish your wages. For some debts, such as family support or past-due taxes, a judgment isn’t required. New York law limits the amount of money your employer can withhold from each paycheck due to garnishment. Family support debts or debts owed to public entities (like back taxes) have different limits and rules.

Once a garnishment is in place, it continues until you either pay the debt, leave your job, or file bankruptcy.