There are four direct ways you can take action to stop a wage garnishment: 1. Try to negotiate a payment plan with your creditor(s) or settle your debt. 2. Challenge the wage garnishment in court. 3. File for bankruptcy to stop the garnishment fast. 4. Reach out to a nonprofit to ask for financial assistance. Having your wages garnished reduces your disposable income and can feel very stressful. But remember, you have rights and there are ways to stop the garnishment.
Written by Kristin Turner, Harvard Law Grad.
Updated May 5, 2023
How To Stop a Wage Garnishment Immediately
The most important thing you can do is take action as soon as possible and to never ignore a wage garnishment order.
Here are four ways to stop wage garnishment right now:
1. Contact the Debt Collector or Creditor To Negotiate a Payment Plan
If the original creditor sold your debt to a debt collection agency, you may have some luck negotiating a payment plan or debt settlement. That’s because debt collectors buy debt for pennies on the dollar. If you’re able to agree on a payment plan, you’ve successfully stopped a garnishment before it started! Note that to settle your debt, you usually have to offer one lump-sum payment.
If the debt is still with the original lender or creditor and they’ve already won a wage garnishment court order, it may be difficult to negotiate a payment plan, but it’s still worth asking. Call the creditor and explain your situation. Ask if there are options to get on a payment plan that you can afford.
If your monthly income and living expenses don’t allow you to offer a payment plan that pays at least as much as the garnishment order, the creditor is not likely to agree to it. But that doesn’t mean you are out of options! You can still try one of the other three ways to stop a wage garnishment fast.
2. Challenge the Wage Garnishment in Court
When you receive the wage garnishment order notice, you’ll also receive instructions on how to challenge the garnishment order in court. To challenge a wage garnishment, you simply need to file paperwork with the clerk of the court that granted the garnishment order.
If you plan to do this, act quickly. Depending on your state, you may have as few as five business days to file a claim of exemption or similar paperwork. Once that time has passed, your employer (or their payroll company) won’t have a choice but to garnish your paycheck.
Challenging the garnishment may be able to buy you a little time, but more importantly, it may help limit or stop the garnishment altogether. You can challenge a garnishment if some of your income is exempt from being garnished. Exempt income can include Social Security, unemployment, and retirement benefits. You can also challenge a garnishment if your income is already being garnished by another creditor.
3. Stop the Wage Garnishment by Filing for Bankruptcy
Filing bankruptcy stops wage garnishment fast. How? Once you file your case, you are protected by the automatic stay. This stops creditors, including those with wage garnishment orders, from trying to collect on your debts while you’re in the bankruptcy process. If you're eligible, our nonprofit has a web app that will walk you through the process of filing for Chapter 7 bankruptcy for free.
Filing bankruptcy isn’t the right choice for everyone, but if you’re buried in credit card debt, debt from medical bills, or simply can’t keep up financially, it’s worth considering the pros and cons of Chapter 7 bankruptcy. Filing Chapter 7 bankruptcy can give you some financial breathing room and grant you a fresh start once you get your debt discharged.
It’s important to note that even though the automatic stay stops most collection activities, collection of child support and alimony are exceptions to this rule. Garnishment orders for this type of debt survive the bankruptcy filing.
4. Get Help From a Nonprofit
If you’re having a hard time keeping up with your payments, consider signing up for a free credit counseling session with a nonprofit near you. A credit counselor will review your financial situation and make recommendations on how to deal with debt collectors. They may even be able to help you put together a repayment plan to offer to the bank that’s suing you.
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How Does Wage Garnishment Work?
Wage garnishment is a debt collection tool. If you have unpaid debt with a creditor or debt collector and they sue you to collect on the debt, they can win a court order (called a judgment) against you. This allows them to take money directly from your paycheck to pay down the total balance you owe.
Having your wages garnished is stressful, but you aren’t powerless. There are wage garnishment laws that limit the amount of money that can be taken from each paycheck. You also have certain consumer rights when it comes to debt collection and debt collectors.*
*Federal law allows your wages and Social Security benefits to be garnished for back taxes and student loan debt no matter what. This means the U.S. Department of Education and the IRS can both garnish your wages without first filing a lawsuit or getting a judgment.
How Much of My Wages Can Be Garnished?
There’s a limit to how much creditors can garnish from your wages. Under federal law, the garnishment amount can’t be more than 25% of your disposable income or the amount by which your take-home exceeds 30 times the federal minimum wage (currently $7.25/hour); whichever is less.
It’s important to know that creditors and collection agencies cannot take money right out of your bank account with a wage garnishment order—they can only receive a percentage of money from your paychecks. State law and exemptions determine what steps a creditor has to take to pursue other collection efforts and exemptions limit how much they can take.
You can always try to challenge the judgment of a wage garnishment order or negotiate wage garnishment with the creditor who filed the order. But, they’re in the driver’s seat and if they don’t allow you to stop a garnishment process, you need to take other action. There are several ways to stop wage garnishment that will hopefully result in debt relief and improve your credit score and overall finances in the process.
While filing for bankruptcy is one way to stop wage garnishment, bankruptcy is not right for everyone. Contacting a bankruptcy lawyer is alway a good option if you have questions about the bankruptcy process, debt consolidation, or are in need of general legal advice. Our free filing tool may be a good alternative if you’re ready to file but can’t afford to hire a bankruptcy attorney to review your bankruptcy case.
For more on how to stop wage garnishment, check out the video below ⬇️.