Written by Upsolve Team. 
Updated October 25, 2021

Wage garnishment is a debt collection tool creditors use to collect money on an unpaid debt. Before creditors can garnish your wages, most need to get a court order to withhold part of your disposable earnings to pay the debt you owe. New Hampshire law protects its residents and limits the amount that can be garnished. Under state and federal laws, some sources of income can’t be garnished. This article will help you understand what wage garnishment is, how it works in the Granite State, and what you can do about it. 

What Is Wage Garnishment?

A wage garnishment is a legal process creditors use to collect past-due debt by having wages withheld directly from your paycheck each payday. Generally, the creditor needs to get a court judgment before garnishing your wages. The wage garnishment process begins with a debt collection lawsuit. Wage garnishments are limited by federal and state laws. Federal law sets minimum wage garnishment limitations that all states must follow. State wage garnishment laws can expand those protections. 

Who Can Garnish My Wages in New Hampshire?

Creditors, debt buyers, and debt collectors who have a judgment can seek to garnish a portion of your wages or your bank account. If you don’t make your credit card payments or your private student loan payments, or if you default on any consumer debt, the creditor can sue you for a money judgment. 

Certain debts like child support payments are automatically withheld from your paycheck by New Hampshire law with an income withholding order. Creditors for other debts like unpaid tax debt and defaulted federal student loans don’t have to get a court judgment to start a wage garnishment. This article focuses on wage garnishment for non-special consumer debts, such as credit card debt where creditors or lenders must first get a judgment from the court.

New Hampshire Garnishment Process

The wage garnishment process begins with a lawsuit. A creditor may sue to recover an unpaid credit card bill or a medical expense. You will be served with a summons and complaint. These are court papers that start a lawsuit. They must state the amount of the unpaid debt. If you don’t respond to those papers, a default judgment will be entered against you for a certain amount of money. If you do respond, but you don’t have a valid defense or objection, the court can find in the creditor’s favor and issue a money judgment. When you don’t pay the judgment, New Hampshire law allows a creditor to seek a wage garnishment. 

At this point, the creditor is called a judgment creditor. When you don’t pay the judgment, the judgment creditor probably won’t just walk away from the debt. The law gives them certain tools to collect the debt. One tool is wage garnishment. If a third party (a garnishee) such as your employer is holding onto money that they owe you, the judgment creditor can seek an order directing the garnishee to pay the money to them.

In New Hampshire, creditors must file a motion (a request) to the court for periodic payments to get a wage garnishment order. The court will schedule a hearing, which you have to attend. You should receive notice of the hearing either by hand delivery or via mail. At the court hearing, you will have to complete a financial information form. This information form is a statement of your assets and liabilities. The creditor or the court may ask you questions under oath. The questions will be about your assets and your ability to pay the judgment. 

The court will decide whether you have the ability to make periodic payments on the judgment and how much those payments should be. The court will take you and your family’s needs into account when calculating this amount. If you don’t attend the court hearing, the court may proceed to enter an order without your input. The court won’t be able to consider your support obligations or your financial situation before entering the order. So, it’s a good idea to attend the hearing.

One of the ways you can prevent a wage garnishment is to raise a statute of limitations defense during the debt collection lawsuit. The statute of limitations is the time a creditor has to bring a lawsuit. Under New Hampshire law, creditors have between three and six years to bring a collections lawsuit, depending on the type of debt. Most consumer transactions have a three-year statute of limitations. So, if the statute of limitations is out, you can use this as a defense to the lawsuit. 

How Much of My Paycheck Can Be Taken by Wage Garnishment?

New Hampshire wage garnishment laws follow federal law. Every state is subject to this law, but some state laws provide more income protection, so you have more money in your pocket each pay period. In New Hampshire, creditors can garnish the lesser of:

• 25% of your weekly disposable income, or

• The amount that your weekly earnings exceed 30 times the federal minimum wage. This is currently $7.25/hour, and 30 times that is $217.50. If you make this amount or less, all your wages are exempt from garnishment. 

Disposable wages are your gross income minus legally required deductions. These deductions include payroll taxes. Wage garnishments can’t ever exceed the judgment amount plus costs, fees, and interest.

New Hampshire Protections

New Hampshire provides more protection than many other states. In other states, wage garnishments are continuous. This means creditors can continue to garnish your wages until the judgment is satisfied. But New Hampshire doesn’t allow wages to be continuously garnished. Wages must be earned, but not yet paid, to be garnished. So, a creditor can garnish only two weeks of your wages if you are paid bi-weekly. To continue to garnish your wages, the creditor must go back to court and get an order. This obviously can be very inconvenient for the creditor.  

Exemptions

Federal law and New Hampshire law exempt certain income and property from debt collection. Here are some available exemptions:

• Federal law exempts Social Security from garnishment for all debts except child support, spousal support or alimony, and federal income taxes

• Federal law exempts federal pensions under certain conditions.

• New Hampshire law exempts wages of state employees, police officers, firefighters, and federal employee pensions.

• New Hampshire law also exempts certain public benefits from garnishment, though they might not technically be considered wages. These are workers’ compensation benefits, unemployment insurance benefits, aid to families with dependent children, and certain individuals with disabilities.

How To Stop a Garnishment in New Hampshire

You can stop a wage garnishment by paying off the debt. To do that, you can make a lump-sum payment, if possible. Or you can contact the creditor and try to negotiate a repayment settlement to pay the debt in installments. You can also just let the garnishment order run its course until the debt is paid.

Filing bankruptcy will also stop a wage garnishment. When you file a bankruptcy case, the court will issue an automatic stay. This halts all debt collection activities, including wage garnishment, while your case is being reviewed. If you have other debts, bankruptcy can provide you with debt relief by discharging them. Much of your property and other assets are protected through state exemptions.

If you’re considering filing Chapter 7 bankruptcy you can use Upsolve’s free tool to see if you qualify to file for free, without an attorney. In some cases, you may want to contact an attorney for legal advice. Upsolve can help you find an experienced bankruptcy attorney to have a free consultation with.

Are There Any Resources for People Facing Wage Garnishments in New Hampshire?

If you’re facing wage garnishment in New Hampshire, there are resources to help. You can start with the following:

• Free legal help through New Hampshire legal aid.

• Free Legal Answers from the American Bar Association connects you with an attorney who can answer your questions.

• The New Hampshire Judicial Branch provides access to an online law library and a list of forms and fees including the Motion for Periodic Payments form.