A wage garnishment is a legal process where a court order or government agency requires your employer to withhold a part of your earnings to pay back an unpaid debt. If you are a New Yorker who’s worried about wage garnishment, read this article to learn what wage garnishments are, how they work in New York, and what you can do about them.
Written by Upsolve Team.
Updated October 19, 2021
A wage garnishment is a legal process where a court order or government agency requires your employer to withhold a part of your earnings to pay back an unpaid debt. Many New Yorkers who can’t pay their outstanding debts face wage garnishment. If you’re one of them, you’re not alone. If you are a New Yorker who’s worried about wage garnishment, read this article to learn what wage garnishments are, how they work in New York, and what you can do about them.
What Is Wage Garnishment?
Wage garnishment is a legal procedure creditors can use to collect a debt by having funds withheld directly from your paycheck. Generally speaking, wage garnishment is only possible with a court order. The creditor needs to get a judgment from the court before it can garnish your wages. In New York, wage garnishment is called an income execution. Federal law and New York state law limit the amount of money creditors can garnish. So, your entire paycheck can’t be withheld. Wage garnishment laws also exempt certain income from garnishment.
Who Can Garnish My Wages In New York?
Creditors, debt collectors, and debt buyers who get a valid judgment against you can attempt to collect the debt by garnishing your wages. They can’t seek an income execution before they have a judgment. Income executions start with a debt collection lawsuit. If you fail to pay your credit card debt or a medical bill, you can be sued by the creditor. You will be served with a summons and complaint. Answering the summons and complaint will stop a default judgment from being entered against you. A judgment is a court order for a certain amount of money.
After a court judgment is entered, the creditor can enforce it. What that means is the creditor can go after your assets to pay off the judgment. There are two main debt collection tools they use to do this: wage garnishment and bank account garnishment. Wage garnishment is different from bank account garnishment. A wage garnishment requires your employer to withhold a certain amount from your paycheck to pay the creditor. A bank account garnishment allows a creditor to remove funds directly from your bank account.
In special circumstances, a wage garnishment can happen without first getting a money judgment. If you owe income tax debt, government student loans, or court-ordered child support, the government agency or creditor can garnish your wages without a court order. But for most types of debt, a creditor needs a judgment before it can garnish your wages. This article focuses on wage garnishment for private debts, such as credit card debts or medical bills, where a judgment is required.
New York State Wage Garnishment Process
If you don’t pay a money judgment, the judgment creditor can start the wage garnishment process. The creditor will send a notice of income execution to an enforcement officer. In the five boroughs of New York, the enforcement office is the New York City Marshal. In other parts of the state, the enforcement officer is the county’s sheriff. New York City has a sheriff, but the sheriff is usually involved in debts that are more than $25,000.
The New York City Marshal or county sheriff will then serve you with notice of the income execution. This notice will advise you of the judgment and give you 20 days to call the marshal or sheriff to set up a voluntary payment plan. Your employer is not notified at this time.
If you don’t contact the marshal or sheriff after 20 days, the marshal or sheriff will serve your employer with the income execution. You can send a written objection to the wage garnishment if you have grounds to object. Grounds to object might be: You satisfied the debt, you are in bankruptcy, or you are in a payment plan with the creditor.
Your employer will be the one to withhold a certain portion of your earnings to satisfy the debt. Your employer will deduct the amount that is to be garnished before your earnings enter your bank account. After your employer starts to hold back a certain portion of your wages, the marshal or sheriff will periodically send you an accounting statement that tells you how much of the debt has been paid by garnishment and how much remains to be paid.
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How Much of My Paycheck Can Be Taken by Wage Garnishment?
The amount that can be garnished from your paycheck depends on your income. In New York, a creditor can garnish the lesser of 10% of your gross wages or 25% of your disposable income. Disposable income is the amount you make after your employer makes legally required deductions from your paycheck. These include federal, state, and local taxes, Social Security, and unemployment insurance. Deductions for union dues or insurance aren’t included in your disposable income calculation.
If your disposable income is less than 30 times the state minimum wage, then you are exempt from wage garnishment. So garnishment is limited by exemptions on a per-paycheck basis.
Here’s the way it works: In New York City, the minimum wage is $15 per hour. If your weekly disposable earnings are $450 or less, you are exempt from an income execution. If your weekly disposable earnings are over $450, you will have to pay the lesser of 10% of your gross income or $25% of your disposable earnings.
For example, if your weekly gross income is $780 and your disposable weekly earnings are $620, you would have to pay the lesser of:
10% of weekly gross income ($780 x .10) = $78, or
25% of weekly disposable income ($620 x . 25) = $155
In this case, the garnishment amount would be $78. Also, the total amount garnished can’t exceed the judgment plus fees, costs, and interest.
Social Security, including Social Security Disability and Supplemental Security Income
IRAs and other retirement accounts
Child support and alimony
90% of income earned in last 60 days
How To Stop a Garnishment in New York
Paying the debt in full would stop a garnishment. You can pay it in a lump sum or come to an agreement with the creditor to pay the debt in installment payments.
If the creditor got a default judgment against you, you can also file an order to show cause. This is an emergency motion asking the court to vacate, or remove, the judgment. You will have to show grounds as to why you didn’t answer the debt collection lawsuit. Grounds would include that you didn’t receive notice of the lawsuit, you were ill and couldn’t respond, or you were out of town. You also should state a reason why the creditor shouldn’t win the lawsuit. A reason the creditor shouldn’t win would be that you don’t owe the debt. If the court vacates the judgment, the garnishment will stop.
Bankruptcy is another way to stop wage garnishment. If you owe more than one debt, you can get debt relief with a bankruptcy filing. Many debts can be wiped out through Chapter 7. You can hire an attorney to help you file or you can file by yourself. If you can’t afford to pay for legal services, you can check if you are eligible to use Upsolve’s free filing tool.
Are There Any Resources for People Facing Wage Garnishments in New York?
Yes, there are self-help resources available to you, such as: